Judgment C-472/2023 of the Court of Justice of the EU (CJEU): Financial Institutions must comply with Disclosure Requirements.
The Court of Justice of the European Union (CJEU) delivered Judgment No C-472/2023, on 13 February 2025, as questions arose in a preliminary procceding by the Polish Court of Justice (Warsaw District Court). The judgment is based on key articles of Directive 2008/48/EC in relation to consumer credit, concerning disclosure obligations of financial institutions towards consumers, and the consequences of non-compliance with these obligations.
Main Articles of Directive 2008/48/EC on which Decision C-472/2023 is based:
- Article 10 of Directive 2008/48/EC: the Article focuses on disclosure obligations to be provided to consumers before the conclusion of a consumer credit agreement. According to the Article, financial institutions must fully and clearly inform consumers of the terms & conditions of the credit agreement before its conclusion.
- Article 23 of Directive 2008/48/EC: the Article regulates the consequences of failure of financial institutions to comply with disclosure obligations. It provides that financial institutions may be deprived of the right to charge consumers additional interest or fees if they fail to provide the required information to their customers at the time of the conclusion of the contract.
Preliminary Questions:
The Polish Court of Justice referred the following questions to the CJEU for a preliminary ruling:
- Does the failure to provide consumers with the required information, as defined in Directive 2008/48/EC, lead to the loss of the right of the credit institution to charge interest or other charges?
- Does the creditor lose the right to demand interest or other charges in excess of the amount specified in the original contract in the event of failure to comply with the disclosure obligations under Directive 2008/48/EC, even if the debt remains outstanding?
CJEU judgment:
The CJEU ruled an important judgment in this case, highlighting that if a credit institution (e.g. bank, financial institution) fails to provide the required information under Directive 2008/48/EC, it may be deprived of its right to charge interest or other fees to the consumer, even if the debt remains unpaid. This judgment reinforces transparency and consumer rights and highlights the importance of a full and clear disclosure.
Conclusions:
The CJEU's decision C-472/2023 confirms that financial institutions must comply with disclosure obligations under Article 10 of Directive 2008/48/EC. Credit institutions are required to provide clear and comprehensible information to consumers prior to the conclusion of loan or credit agreements. Failure to comply with their obligations may have serious consequences, including restrictions to charge interest or additional charges. This decision strengthens consumer protection in the EU and promotes transparency in financial transactions, ensuring that consumers are fully aware of the terms of their contracts.
Authors: Vasiliki Christoforou, Senior Lawyer and Eleftheria Evripidou, Lawyer
