I just saw the following on the BBC:
"Spanish banks may have to repay €4bn to mortgage customers
Posted at 12:01
Shares in Spanish banks have tumbled after a ruling from Europe's top court that means they will have to repay mortgage customers up to €4bn (£3.36bn).
The customers had signed mortgage contracts that unfairly prevented them from benefiting from a steady drop in interest rates.
A previous ruling had limited the amount that the banks were liable for.
But judges at the EU Court of Justice said that borrowers who paid too much interest on their mortgages were entitled to a refund for the entire mortgage period, not just for the amount paid since a 2013 ruling.
"The finding of unfairness must have the effect of restoring the consumer to the situation that consumer would have been in if that term had not existed," it said in a statement.
"Consequently, the finding that 'floor clauses' are unfair must allow the restitution of advantages wrongly obtained by the seller or supplier to the consumer's detriment," it added. "
I had a mortgage with Satander, which had a floor in the mortgage repayment at 2%, so I never got any benefit once the BoE fellow below that level. I was never informed of the floor, but read about it in my terms once it hit the news sometime ago and thought it was my own fault for not reading.
Anyway, give the news item above, am I entitled to compensation and will the bank contact me or do I need to contact them? Any views?
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Re: What does this mean?
The various articles state that Santander are not affected by this ruling as they never had 'floor clauses'. For example - http://www.ft.com/content/8e5fb9f2-c760-11e6-8f29-9445cac8966f
In any event, this is in regard to a Spanish court ruling that decided such clauses were not legal (in Spain). AFAIA such a ruling would have no affect on UK mortgages.
Whether your mortgage is on the same basis I don't know. Caps and Collars on 'tracker' mortgages have been common over here for some time. I would imagine the difference may well be the level of disclosure - the Spanish case seems to suggest that the floor clause was hidden such that customers would not have been aware of it at the time they took the mortgage out. Disclosure of such clauses has generally been a lot stronger in the UK.
In any event, this is in regard to a Spanish court ruling that decided such clauses were not legal (in Spain). AFAIA such a ruling would have no affect on UK mortgages.
Whether your mortgage is on the same basis I don't know. Caps and Collars on 'tracker' mortgages have been common over here for some time. I would imagine the difference may well be the level of disclosure - the Spanish case seems to suggest that the floor clause was hidden such that customers would not have been aware of it at the time they took the mortgage out. Disclosure of such clauses has generally been a lot stronger in the UK.
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