| CONSUMER PROTECTION — Consumer credit — Consumer’s right to pursue remedies against grantor of credit — Whether permissible to subject right to condition that goods or services be named in credit offer — Whether right only available for single-transaction credit or also for multi-purpose credit facility — Council Directive 87/102/EEC, art 11(2)
Rampion and another v Franfinance SA and another (Case C-429/05)
ECJ: President of Chamber Jann, Judges Tizzano, Borg Barthet, Ilešič and Levits: 4 October 2007
A consumer’s right under certain conditions, under art 11(2) of Directive 87/102 on consumer credit, to pursue remedies against the provider of finance to him under a credit agreement, applied to a credit facility allowing credit on a number of occasions as well as credit for a single transaction, and the right could not be made conditional on the prior offer of credit naming the goods or services being financed.
The First Chamber of the Court of Justice of the European Communities so held, inter alia, on a reference for a preliminary ruling by the Tribunal d’instance de Saintes, France.
Art 11(2) of Directive 87/102 provides that where a purchaser enters into a credit agreement with a person other than the supplier (“the financier”), the financier and the supplier have a pre-existing agreement pursuant to which the consumer obtains his credit, the goods or services are not supplied or are defective, and the consumer has unsuccessfully pursued remedies against the supplier, “the consumer shall have the right to pursue remedies against the grantor of credit”. Art 2(1)(e) provides that the Directive is not to apply to “credit in the form of advances on a current account”.
Under French law, the protection of consumers under the Consumer Code was only available in the case of credit transactions if the goods or services being financed were indicated in the offer sent to the borrower. The claimants in France ordered windows from a company, K, under a contract of sale under which the purchase was to be financed by credit granted by company F. The offer of credit identified the seller by the reference “K platform account”, but did not specify the goods being financed. On delivery, the sills and frames were found to be infested with parasites. In proceedings brought by the claimants against F and K, a ruling was sought from the European Court on, inter alia, the question whether the right under art 11(2) of Directive 87/102 could be made subject to a condition such as that in the French legislation.
THE COURT said that the defendants argued that art 11(2) only applied to tied credit, serving to finance a single transaction, and not to a credit facility such as that said to have been granted to the claimants. There was nothing in the logic or aim of Directive 87/102, or in the wording of art 11(2), to support that argument, and the arrangement of a credit facility for the sole purpose of making credit which could be used several times was not excluded by art 2(1)(e). It would therefore be held that art 11(2) applied both to credit designed to finance a single transaction and a credit facility allowing the consumer to use the credit granted on a number of occasions. A condition that the art 11(2) right was conditional on prior naming of the goods or services did not appear among the cumulative conditions there set out. For those and further reasons, the right provided for in art 11(2) could not be made subject to the condition that the prior offer of credit had to indicate the goods or services being financed.
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