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Disputing the Global Effective Rate (TEG) is an essential element of a loan offer. The TEG must include in its calculation all the fees imposed by your banker to agree to finance you. It can thus be used to compare different offers and must neither be erroneous nor exceed the rate of wear, under penalty of sanctions .
The lawyers :-
DAMY’s lawyers are at your disposal to assist you in contesting this tariff. In the majority of cases, our claims result in court to reduce the amount owed by the consumer to the legal interest rate. The rate will therefore be approximately 0%.
Consumers therefore have every interest in mobilizing because around one out of two credit contracts would be affected.
In 2015, the French would be, to date, likely to claim 90 billion euros from the banks.
Borrowers and financing concerned by the TEG
The legislation on the overall effective rate concerns:
all financing granted to individuals,
all financing granted to professionals (including discounting and factoring), legal persons and natural persons (craftsmen, traders, farmers, liberal professions, etc.)
The elements used in the calculation of the TEG according to the legislation
The TEG:-
The TEG takes into account all the mandatory fees, application fees, insurance, ancillary costs… These are all the fees imposed on you by your banker to obtain the loan that must be included in the determination of the TEG.
Optional options are not integrated into the TEG. This will be the case, for example, of consumer credit insurance.
Under the terms of article L313-1 of the Consumer Code, “for the determination of the overall effective rate of the loan (…) interest is added to the costs, commissions or remuneration of any kind, direct or indirect, including those which are paid either because of intermediaries intervening in any way whatsoever in the granting of the loan, even if these costs, commissions or remuneration correspond to actual disbursements.
(…) the expenses related to the guarantees with which the appropriations are possibly matched as well as the fees of the ministerial officers are not included in the overall effective rate defined above, when their amount cannot be indicated with precision before the final conclusion of the contract. ‘agreement. contract.
In addition, for loans that are subject to staggered amortization, the overall effective rate must be calculated taking into account the methods of amortization of the debt. »
There is abundant case law on the elements which must or must not be included in the calculation of the TEG. If you consult us, we will help you understand what is happening in the TEG. We will do a personalized consultation within 48 business hours to tell you if you have the right to dispute your credit report.
Time limit for contesting the calculation of the TEG (or its absence)
Starting point of the period
· If it is a loan, the prescription runs in the absence of TEG, from the date of the contract; in the event of an erroneous TEG, from the day the error was revealed.
· If it is an overdraft, the prescription runs from the receipt of the account statements indicating or to indicate the TEG applied.
Limitation period
The limitation period is five years by application of article 110-4 of the commercial code modified by the law of June 17, 2008.
Attention ! The prescription can also start to run after the date of signing, if you became aware of the error after signing the loan agreement. The date of the expert report will then be retained.
In other words, a contract concluded more than 5 years ago may be concerned.
Not to be confused with the two-year foreclosure on consumer credit delinquencies. Actions for payment initiated on the occasion of the default of the borrower must be formed within two years from the event which gave rise thereto, on pain of foreclosure.
Penalties in the event of usurious, erroneous or absent TEG
The actions for exceeding the wear rate and that for absence of TEG (or erroneous TEG) are not mutually exclusive.
| WEAR RATE EXCEEDED | ABSENCE OF TEG OR TEG ERROR | |
|---|---|---|
| Penalty sanction | 2 years imprisonment and 45,000 euros fine or only one of these two penalties | Fine of 4,500 euros |
| Civil penalty | Excessive collections are deducted by operation of law from the normal interest then due and, alternatively, from the capital of the claim. If the debt is extinguished in capital and interest, the sums unduly received must be returned with interest at the legal rate on the day on which they will have been paid. (article L313-4 of the Consumer Code and L313-5 of the Monetary and Financial Code) |
Consumer loans: Forfeiture of the right to interest (article L311-48 of the Consumer Code): the borrower is only required to repay the capital according to the schedule provided. The sums collected as interest, bearing interest at the legal rate from the day of their payment, will be returned by the lender or set off against the capital remaining due. Other financing: Substitution of the legal interest rate for the contractual interest rate since the origin of the debt on all or part of the debt (at the discretion of the judge). |
Some difficulties in determining the TEG
A difficulty in calculating an APR (once you have determined with certainty the elements you want to take into account) sometimes lies in the distribution of these expenses between the different loans.
When a financing plan consists of several loans, typically for real estate financing, certain expenses will have to be distributed between these different loans in order to bring out a TEG per loan.
For example: in the case of the financing of the acquisition of land and a construction, it can be said that the registration fees of the usurious lien relate to the land and those of the mortgage relate to the construction . We obviously know the cost of acquiring the land and the cost of the construction, but if the financing plan is made up of several loans, we can wonder which of these loans finances the land and which finances the construction since they will have to bear the cost of the corresponding guarantee.
Another illustration. By imagining that the cost of the annual information of the surety is included in the base of the TEG, the distribution of this cost can take place between the various loans according to their respective duration or according to their respective amount.
And one could multiply the examples relating to the uncertainties which weigh on the load of the loads on the various loans composing a plan of financing…
The legislator thus intervened in 2016 to create the APR. For more details, we invite you to consult our news on this subject.
It is for these reasons that it is advisable to be particularly careful before initiating an action tending to prove that the TEG mentioned in the contract is erroneous; it is imperative, beforehand, to be communicated by the lender the mode of distribution which governed the various calculations.
The Court of Cassation (1) now specifies that it is up to the judge, thanks to his sovereign power, to determine when the applicant was able to detect the error on the TEG. The Court of Appeal had to determine whether the said applicant “was actually able to detect the alleged error, simply by reading the deed of loan, by carrying out the disputed calculation himself”.
With this decision, the Commercial Chamber marks a turning point in case law concerning the prescription of the action challenging the overall effective rate of credit.
- Ruling n°415 of September 09, 2020 (19-10.651) – Court of Cassation – Commercial, Financial and Economic Chamber: https://www.courdecassation.fr/jurisprudence_2/arrets_publies_2986/chambre_commerciale_financiere_economique_3172/2020_9593/septembre_9872/415_09_45 3 54.html
We can take care of all these formalities. Do not hesitate to contact our secretariat to make an appointment with Maître DAMY, specialist in commercial law and more particularly in litigation with banks at 04.92.15.05.05.
