Fees for claiming overdue balances or the collection of unpaid debts (between 20 and 30 euros each time it occurs). This violates the discipline rule that governs the relationship between credit institutions and their customers as provided in the Third Ruling of the Bank of Spain’s Circular 8/1990 Section 3 and Number Five of the Ministerial Order of 19 December on interest rates and fees, performance standards, customer information and advertising. It should be remembered that the Bank of Spain’s Claims Service reiterates in its Report that these sorts of fees do not correspond to any service provided to customers, as they are unfair in their automatic application.

High and unfair default interest rates: The compensation on penalty interest includes compensation for non-payment of the remunerative interest agreed. For this amount, we see that compensation is disproportionately high. If the debtor in good faith cannot pay the corresponding remunerative interest, then payment is made more difficult by a substantially greater penalty interest clause, especially, taking into consideration that on the other hand the debt has a sure guarantee. Law 1/2013 of May 15th sets a limit on arrears interest at three times the legal interest (currently 4% so the limit would be 12%).

Order for payment charges: When the borrower makes a payment in order to fulfill his obligation, the amounts paid will be considered in the following order: 1-Commissions, 2-default interest, 3-taxes, 4-anticipated expense of the contract itself, 5-ordinary interest and 6-repayments due. This violates the system as laid out in Articles 1172, 1173 and 1174 of the Spanish CC. (This clause has a bearing on the very substance of the contract because, ultimately, it determines the way in which payments will be assigned, which are the debtor’s main obligation, but there is no evidence of any negotiation between the parties). Its significance may even lead to invalidating the contract, since it is clear that by establishing a system of charges which prioritizes the repayment of the main outstanding payment, the amount due of ordinary interest and the overall repayment could be very different, leading to a monetary claim with a different amount to the debtor’s. Law 1/2013 of May 14th already lays out another very different order.

Waiver of guarantors rights, and specifically the benefits of order, division, excursion, and suppression of Article 1851 of the Spanish CC. In documents it is sometimes indicated in the following way: Conformity is granted by guarantors to any kind of tolerance which, with exception, the financial institution has with the borrower, namely the granting of a virtual moratorium, without the need to be notified “or” …  expresses their desire that the guarantee provided herein be fully effective until the obligations are completely fulfilled and canceled  under this contract and even if the financial institution does not demand at its maturity compliance of the obligations or extend  the duration of the loan.” (Art. 1851 of the Spanish CC states: Extension granted to the debtor by the creditor without the consent of the backer terminates the bond”.

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