Loans in Swiss francs: a BNP Paribas subsidiary sent to court

The judges refer BNP Paribas Personal Finance to the Criminal Court for “misleading commercial practice” in the “Helvet Immo” case.

La filiale à 100 % de BNP Paribas est accusée d’avoir dissimulé les risques de ses prêts en francs suisses Helvet Immo vendus en 2008-2009, au détriment de plus de 4 600 emprunteurs.

BNP Paribas Personal Finance (PF), known to the general public under the Cetelem trademark, will ultimately be judged for “misleading commercial practice” in the case of real estate loans in Swiss francs Helvet Immo. In accordance with the requisitions of the Paris public prosecutor’s office, on 29 August the judges ordered the transfer to the Paris Criminal Court of this wholly-owned subsidiary of BNP Paribas.

The facts now go back almost 10 years. Between March 2008 and December 2009, the group sells more than 4,600 Helvet Immo loans, extremely complex products, which at first sight offer a more attractive interest rate than those of the competition- payday loan debt consolidation via Smart Keywords useful source. Indeed, the amount borrowed is in Swiss francs, but it is repaid in euros. So if the Swiss franc appreciates against the euro, the monthly repayment refunds less capital, and the duration of the credit is extended (in the limit of five additional years). In addition, the client is likely to see the amount of its maturities increase. Between March 2008 and January 2015, the euro went from 1.57 to 1.04 Swiss francs.

In the order for reference, which Le Monde obtained a copy of, the judges cite the example of a couple whose initial amount of the loan in Swiss francs was equivalent to 143 867 euros, and who had to face an additional cost capital of more than 46,700 euros (excluding additional interest costs).

“A long, confused and unintelligible loan offer”

Have clients measured the risk of these credits? In this order, the judges criticize BNP Paribas PF for having “produced a long and confused, unintelligible loan offer, where the exchange rate risk is approached only in an implicit and allusive way, without the very terms of risk of change are not used. However, the meaning of the law of consumer protection “is to put on the professional’s responsibility an obligation of clarity in the information”.

These Helvet Immo loans mainly concerned the purchase of housing for rent under the tax schemes Robien or Scellier and were marketed by intermediaries in banking operations. BNP Paribas PF “has issued to its intermediaries in contact with consumers arguments with the same shortcomings, insisting on the competitiveness of the rate and failing to accurately describe the currency risk, ” the judges still emphasize. A former regional director of the agency, cited in the order, also told the judges that serious doubts existed from the marketing of the product.

“Several hundred million euros”

“If the bank were to be condemned, the borrowers could be compensated at 100% of the currency risk. This could cost the institution a total of several hundred million euros, ” said Charles Constantin-Vallet, a lawyer for more than 800 civil parties and the consumer association CLCV, which started a group action against the subsidiary BNP Paribas. In addition to the criminal aspect and this “class action”, private individuals have also launched civil actions.

“We take note of this order. BNP Paribas Personal Finance will answer the terms of these before the court and challenges, as it has always done, the facts that are alleged against it, ” responded the institution, saying that since January 2012, several jurisdictions have rendered decisions in the context of individual proceedings – in civil cases – and that “a majority has ruled in favor of BNP Paribas Personal Finance” .

Since that case, the July 2013 Banking Act prohibits foreign currency loans for consumers who do not have a principal income – or wealth – in that currency.