Banks will not be able to charge late payment interest and commission for the same overdraft
He Supreme Court (TS) has rejected that a financial institution can simultaneously charge late payment interest and overdraft fees for the same debta practice that considers “proscribed duplication” since the same service cannot be compensated twice.
In a ruling dated December 17, the civil court dismissed the appeal of a company against a ruling of June 2021 of the Provincial Court of Madrid.
In the case analyzed, the affected person is a service area company to which the now extinct Banco Popular He made settlements on different accounts for late payment interest and excess overdraft that in total exceeded 166,000 euros.
The Supreme Court confirms in its ruling that the liquidations show that the financial entity charged interest of 29% on the excess balance and, at the same time, a 4.5% commission on the major overdraft, for the same overdraft.
For the high court, if the financial institution charged late payment interest for the tacit excess, which in practice means the granting of a new credit, “it cannot charge, in turn, a commission on the greater balance of the excess in the same period, because We are dealing with the same service, although they have different purposes.“.
There has therefore been a “outlawed duplicity” of simultaneous accrual and for the same amounts of late payment interest and commission for tacit excess.
In this way, the same service is compensated twice, since, according to the Supreme Court, the commission for tacit excess on a credit account “does not remunerate an effective service other than that which is remunerated by late payment interest”. If the financial institution already charges the agreed late payment interest on the excess, it cannot, in turn, charge a commission on the largest discovered balance, “because the same service is being remunerated under two different concepts.”
