Priscilla Folgosi Castanha
Lawyer at Marcos Martins Advogados
The 22nd Chamber of Private Law of the São Paulo Court of Justice condemned a personal loan company for charging an elderly client annual interest of more than 100% (one hundred percent) for abusive practices.
According to the case file, the bank entered into three personal loan contracts, in different months, with an elderly consumer, charging interest above the market rate and causing a contractual imbalance between the financial institution and the client. Faced with this situation, the consumer filed an action to review the contract, which was dismissed at first instance. Dissatisfied, she appealed to the São Paulo Court of Justice.
The reporting judge, Roberto Mac Cracken, held that the company’s conduct in contracting successive personal loans with the client is characterized as improper, since the bank was aware of the client’s indebtedness and inability to repay the debt. In the case in question, the rapporteur assigned to judge the case understood that, with a consumer over 86 years of age as the contracting party and considering the interest rate of 1,050% per year, it is certain that the event goes beyond mere annoyance and causes the plaintiff discomfort and vulnerability, which is why moral damage is established.
Thus, by a majority vote, a judgment was handed down ordering the financial institution to pay compensation for moral damages in the amount of R$10,000.00 (ten thousand reais), as well as double the amount unduly charged and adjust the personal loan contracts to the average of common market practice, in order to re-establish the contractual balance between the parties. Nevertheless, the judges ordered that a copy of the case file be sent to the Public Defender’s Office of the State of São Paulo, the Consumer Protection and Defense Foundation – PROCON and the Central Bank of Brazil – BACEND, so that these institutions can take the measures they deem appropriate in this case, considering the abusive practice of the banking institution.
