Bad news for loan companies, good news for their clients. At the end of August, the regional court in Prague decided to stop the execution of a client of Profi Credit as illegal. The reason is that the arbitrator who ordered the foreclosure was economically dependent on the loan company and therefore biased.
According to the lawyers who led the dispute against Profi Credit in court, there were many arbitrators economically dependent on credit companies in the past. The judgment thus opens the way for stopping tens of thousands of foreclosures, which until now could not be challenged.
She decided 28 disputes
The court found out that individual arbitrators decided thousands of arbitration contracts in favor of the Profi Credit company, on the basis of which the credit company demanded disproportionately large penalties and interest from creditors.
"Every average consumer expects, if the arbitrator signs the contract, that his case will be discussed by an arbitrator who is independent - even economically - of the credit company," said judge Martina Štolbová. The case before the court was handled by arbitrator Jan Fišer. According to the court, since 2009, he has been deciding hundreds of disputes a year for Profi Credit with remuneration in the order of hundreds of thousands of crowns a year.
Furthermore, the court found that another of the arbitrators who could decide on the contract according to the credit company was Eva Vaňková, who decided almost 28 disputes for the company for a fee of 30 million crowns. "From the above, it can be inferred the obvious economic dependence of both arbitrators on credit companies," said the judge.
Dishonest and immoral
The judge stopped the execution because, according to her, Profi Credit did not treat the client "fairly". The company refuses this. "Profi Credit has always complied with the applicable legal standards and the contracts were in accordance with the applicable legislation. In the event that the client stops paying, in 98 percent of cases an out-of-court settlement is reached," said the company's marketing director, Dana Hakavcová, adding that since December 2016, following the amendment to the Consumer Credit Act, arbitrators no longer use the clause.
In the case under review, the client borrowed 50 crowns and had to pay 126,6 crowns over three years at an annual interest rate of 138 percent. The client paid most of the debt, but fell into arrears. That is why she started to incur an additional fine of 924 percent of the remaining principal per day. The company handed over her case to the executor, who recovered 0,25 crowns plus its costs from her.
According to Petr Němek, the lawyer who represented the creditor, the general court would never agree to execution in such a case. However, according to the German, the arbitrator did not have a problem with this, because he "ignored provisions for consumer protection, good morals and public order".
Profi Credit's lawyer Kateřina Perthenová denied in court that the credit company behaved immorally. According to her, by signing both the interest and the contractual fines, the creditor confirmed and undertook to repay them. "Therefore, they do not contradict good morals, moreover, their amount is reasonable and corresponding to their importance," the lawyer stated in the file.
At the same time, she added that everyone who enters into a binding legal relationship must be sufficiently prudent. "It cannot be the burden of one contracting party that the other is acting carelessly," the lawyer pointed out.
Whoever paid more can ask for the money back
Lawyer Němec told Právu that the institute of arbitrators was originally created to lighten and make the work of general courts more efficient. "Private arbitrators, who go to credit companies in exchange for millions, are definitely not such an alternative," he added.
His colleague Tomáš Pospíšil said that creditors who have paid the credit company more than is acceptable will be able to request their money back.
"After the execution ordered in this way is stopped, people can demand back not only the executor's costs, but also the money they paid in illegal interest and fines," said Pospíšil.
Source: Novinky CZ
