Helvet Immo loans: a subsidiary of BNP Paribas condemned on appeal

BNP Paribas Personal Finance (BNPPF), known through its Cetelem brand, was found guilty at first instance of misleading commercial practices and concealment, for having concealed the risks of its Helvet Immo Swiss franc loan.

In a courtroom full of borrowers, lawyers and journalists, the court of appeal found the company "fully responsible for the damages suffered" but it did not specify the sums allocated to each civil party, due to their large number - 2.500 were formed.

The court also postponed until April 23 and 24 the examination of the cases of several hundred borrowers, for whom the documents provided were not sufficient.

The total compensation nevertheless amounts to tens of millions of euros: at first instance, it reached around 130 million euros.

The bank was finally ordered to publish the decision at its own expense within one month in Le Monde, Le Figaro, Libération and Les Echos.

In the corridor of the capital's historic courthouse, Me Charles Constantin-Vallet, who has defended more than a thousand civil parties for twelve years, addressed a small crowd of them who had come to attend the deliberations.

“What you can remember today is that you won,” he said, provoking applause.

“This legal battle, initiated in 2011, finally finds its outcome for all these modest households caught in the vice of toxic loans which have financially strangled them for so many years,” said the lawyer in a press release.

“We take note of the decision, the merits of which we contest,” declared Dan Benguigui, lawyer for the bank.

“We will carefully examine the judgment of the Paris Court of Appeal to decide whether or not we wish to file an appeal (in cassation, Editor's note). Personal Finance remains attentive to its clients to send them individualized proposals and adapted to their respective situation,” he added.

Euro dropout

Some 4.600 Helvet Immo contracts were signed in 2008-2009. This loan, intended for tax-free rental investment, had the particularity of being denominated in Swiss francs but repayable in euros.

In the wake of the financial crisis, the euro fell sharply against the Swiss currency: the amounts to be repaid then soared. During the trial in May-June, borrowers from all over France came to describe what had become a “financial pit” for them.

For example, a couple who had borrowed 150.000 euros in June 2008 still owed 2014 euros to the bank in 195.000, even though they paid a monthly payment of around 900 euros each month.

On Tuesday, the Court of Appeal specified in particular that it was awarding 30.000 euros for moral damages to people who, "as a result of taking out the loan, found themselves in a situation of over-indebtedness, in forced execution, had to sell their property or continue to work when they could have qualified for retirement.

In parallel with this criminal aspect, thousands of borrowers have initiated civil proceedings in courts throughout France in order to have Helvet Immo contracts canceled, in particular by requesting recognition of “abusive clauses”.

If the bank initially won in a series of cases, after decisions by the Court of Justice of the European Union (CJEU) and the Court of Cassation, the case law has been reversed in recent months and the contracts are canceled , according to Me Constantin-Vallet.

In July 2013, a law banned loans in foreign currencies for consumers who do not receive income or have assets in the same currency.