WIREDGOV

The principle of effectiveness would be compromised if the burden of proving the non-performance of the creditor’s obligations lay with the consumer

An EU directive imposes obligations on the creditor to provide information and explanations so that the borrower can make an informed choice when subscribing to a loan. It also requires the creditor to provide consumers with a Standard European Consumer Credit Information form and to check the consumer’s creditworthiness. 

In France, in two sets of proceedings, certain individuals were unable to repay the monthly instalments under their respective loan agreements, and so the bank sought immediate repayment of the sums borrowed together with interest. The French court called upon to hear the claim states that the bank is not in a position to produce either the Standard European Consumer Credit Information form or any other document proving that it fulfilled its duty to provide explanations. In one case, however, the credit agreement contains a standard term in which the borrower acknowledges having received and taken note of the form. The French court considers that such a term could cause a problem if it had the effect of reversing the burden of proof to the detriment of the consumer. In its opinion, that type of term could make it impossible for the consumer to exercise the right to challenge whether the creditor has performed its obligations in full. 

As regards the obligation to check creditworthiness, the French court states that in the other case the borrower did not provide the bank with supporting evidence of its financial situation. It asks, therefore, whether the consumer’s creditworthiness may be checked solely on the basis of information supplied by the consumer, without such information being effectively scrutinised against other evidence. The referring court also asks whether the duty to provide explanations and assistance may be considered to be fulfilled where the creditor has not checked the creditworthiness and the needs of the consumer beforehand.

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