13/09/2013 PROFILE > Conseil financier

Recent developments in the obligation to inform, warn and consult for a credit dispensing bank

Since 2005, credit dispensers have had an obligation to warn borrowers. This means that the banker, or credit intermediary, should notify a loyal and duly informed borrower, as to its "financial capacities" and "risks of debt levels due to loans".
It should be noted, on the one hand, that the benefit of this obligation is reserved for an "uninformed" borrower. This notion, qualified as subjective by legal doctrine, leaves some room for manoeuvre in legal debates. A notified borrower may be notified by education, profession, habit, revenue or the nature of the loan. Moreover, in the current status of law, a borrower - even notified - may be a creditor for a duty to warn, if the bank has information about with the former is unaware.
On the other hand, the duty to warn is not due if the financial capacities are not compatible with the financial burden of the loan or if the borrower behaves in a disloyal manner.
The burden of proof for this obligation is incumbent upon the bank, which should prove the fact justifying the extinction thereof. The ruling on the obligation to advise in terms of financial management was confirmed for credits. Similarly, it is incumbent upon a professional to demonstrate the quality of a notified borrower. The borrower does not have any particular proof to be provided, aside the financial prejudice caused by the loan.
Once fault has been established, the question of compensation of the victim remains, when the victim "has lost a chance not to be able to take out a loan". Firstly, compensation may not be equal to the total amount of the loan, capital included. However, it may include the total amount of interest, financial costs and potential penalties and, more widely, all costs of any nature whatsoever. Subsequently, certain compensation is calculated on the basis of the loan amount, as a percentage of the latter, notably, in line with the likelihood of not subscribing a loan in the event of a warning.
In such instance as the prejudice should exceed the total amount of the loan alone, the borrower should provide proof that it has not taken out a loan, if it wishes to receive a higher level of compensation.