THE international firm of lawyers Ausbanc has an office in Malaga which has just won a ‘landmark’ case on behalf of one of its clients whereby Banco Popular was required to repay €7,479 in charges which were considered to have been improperly levied.
In Spain it appears to be perfectly acceptable to issue postdated cheques and other securities which mature at a forward date. The recipient can either wait for the date to arrive before cashing the cheque for example or can request that the bank gives an advance on the payment subject to a commission being charged.
This is straightforward, but the problem which has arisen is what happens when the due date arrives, the bank attempts to collect the funds and there are none available. What has been happening up to now is the bank not only recovers the funds from the person who ‘sold’ the document, but also has charged ‘commission’ of up to 6 per cent of the value by way of damages.
Having reviewed the law, the Malaga Ausbanc representative Alfredo Martinez was convinced that what was in effect double charging was not permissible and on behalf of one client took the matter to court. The judge agreed with the advocate’s proposition and instructed the bank to refund €7,479.
According to Ausbanc they estimate that in the province of Malaga approximately 8,000-9,000 payments are returned each month for an average amount of €1,500 each with a penalty of around 6 per cent of the total amount. Therefore in Malaga Province they suggest clients have paid approximately €10 million per year in these penalty commissions.
Anyone looking to reclaim these commissions from their banks must do so within 15 years of being charged.