PITEE Consumer Protection Association
for Financial Services
Learn about what we stand for as an association and the values that shape our actions.
2. Hungary’s Household Foreign-Currency (FX) Debt Crisis in Numbers
|Total household FX debt:||20 bn EUR||11 bn EUR|
|Non-performing FX loans:||4 %||22 %|
|Population of Hungary:||10,014,324||9,877,365|
|Total number of FX loan contracts:||> 1.1 million||620,000|
|Per capita household FX debt:||2,000 EUR||1,150 EUR|
|Average gross monthly wage:||710 EUR||750 EUR|
|Exchange Rate HUF/EUR||286.46 HUF||314.89 HUF|
Click on the numbers to open the source of the information.
Thousands of foreign currency household mortgage contracts may turn out to be invalid following a Budapest Court decision (Hungarian, pdf) that cancelled an OTP Bank contract on December 7, 2012.>DénesILázár., a founder of PITEE, a consumer protection organisation in Hungary told Atlatszo.hu in an interview that the Court’s decision is setting a precedent, admitting the flaws of the Hungarian financial sector’s application of the law. Mr.–Lázár complained about the often irresponsible lending practices of Hungarian banks; he said if the Hungarian Financial Supervisory Authority (PSZÁF) had operated properly, it would have been able to stop massive amounts of citizens taking out foreign currency loans.
Read the full interview in Hungarian on www.atlatszo.hu
4. Hungarian Constitutional Court
The Court delivered various decisions, which show that the judges do not respect the values of the European human rights conventions. In particular, they do not understand the concept of separation of powers.
“In the determination of his civil rights and obligations, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”
(Art. 6(1) of the European Convention on Human Rights).
English translation of important decisions with explanatory notes:
Decision 33/2015 (December 1, 2015)
Decision 3057/2015 (March 24, 2015)
Other English documents about the constitutional court
Hungary’s Government has taken control of the Constitutional Court (March 24, 2015)
Report of three Hungarian Human Rights Groups
5. Other documents in English
Hungarian Constitutional Court denies fair trials for consumers
Open letter to Mr Thorbjørn Jagland, Secretary General of the Council of Europe, in relation to various judgements of the Hungarian Constitutional Court (November 30, 2015)
Translation of the reasoning of the decision No.: IV/1536/2014 of the Hungarian Constitutional Court. The reasoning shows that the judges of the Hungarian Constitutional Court do not respect the values of the European human rights conventions. (April 27, 2015)
Translation of a Statement of the Hungarian Minister of Justice in connection with the laws that aim of providing relief to tens of thousands of consumers who have foreign currency mortgages (February 26, 2015)
Application to the European Court of Human Rights (January 23, 2015)
Application to the European Commission (December 27, 2014)
6. Latest Press Release
Budapest, July 14, 2016
Chief Justice of Hungarian Supreme Court attacks consumer protection lawyers
Mr György Wellmann, Chief Justice of the Civil Division of the Hungarian Supreme Court (Kúria), made a statement questioning the legal qualifications of consumer protection lawyers. Consumer protection lawyers respond in an open letter expressing their fears that the statement might harm public trust in the court system.
Last week the President of the Kúria, Mr Péter Darák and Mr Wellmann gave a press conference on the courts activities in the first half of 2016. According to the court’s figures, more than 200 foreign exchange (FX) consumer loan cases are pending at the Kúria and several thousand other cases are pending at the lower courts. In June the Kúria released its third, so-called uniformity decision (1/2016 PJE) on FX loan agreements.
A uniformity decision is a special dispute resolution tool under Hungarian law which does not exist in countries where the concept of fair trial is respected. A uniformity decision is adopted by an ad hoc chamber of the Kúria whose members are appointed on a case-by-case basis. The chambers do not hold public hearings, and consumers have no right to speak or appeal. Uniformity decisions are binding on the lower courts. Lower courts judges must refer to the uniformity decisions in their judgements, and this reference replaces the reasoning.
Mr Wellmann has played a major role in developing the decision-making practice in use in the FX consumer loan cases. He was member of the chamber which ruled that the judiciary is not competent to decide FX consumer loan disputes and therefore the consumer debt crisis should be resolved by legislation (see Sec. 7 of Uniformity Decision 6/2013). In this uniformity decision the chamber also explained its view that consumer loan agreements must be kept valid in the interest of the consumers, regardless of the consumers’ objections (see Sec. 4 of Uniformity Decision 6/2013). Additionally, Mr Wellmann has been involved in private correspondence with the Hungarian Banking Association in regard to future court decisions (see “Bepanaszolták Ádernél a Kúria egyik bíróját”, HVG April 19, 2016).
At last week’s press conference Mr Wellmann questioned the legal qualifications of consumer protection lawyers, which is widely understood as a warning to consumers not to start court proceedings against their banks. Mr Wellmann accuses the lawyers of doing a disservice to consumers by dragging them into expensive court proceedings with no prospect of success (see “A Kúria elnöke óvatosságra intett”, Magyar Nemzet July 7, 2016).
The consumer protection lawyers are responding in an open letter expressing their fears that the statement might harm public trust in the court system (www.hitelsikerek.hu). In view of the Kúria’s current decision-making practice, it is clear that consumers have no chance to have their loan agreements declared void. The Kúria’s decision-making practice obviously does not respect the consumers’ right to a fair trial. Consumers are losing the court cases even though their claims are supported by better arguments.
Since the lawyers are confident that the European Court of Human Rights will rule in favour of the consumers, the consumers are advised to use all available domestic remedies against court decisions.
Download this press release in a PDF
7. Press Review
- Chief Justice of Hungarian Supreme Court attacks consumer protection lawyers
(July 14, 2016)
- The lack of effective legal remedies fosters abusive lending practices
(June 7, 2016)
- Budapest Metropolitan Court may stop OTP paying dividends.
(May 31, 2016)
- Court decisions in Hungary are not influenced by objective arguments
(May 23, 2016)
- PITEE filed a claim against OTP Bank asking the courts to annul the approval of the financial results.
(May 11, 2016)
- Constitutional Court is depriving FX loan debtors of their human rights (Court Decision 33/2015)
(February 9, 2016)
- Conversion of FX car loans and FX personal loans
(September 29, 2015)
- Banks lose mortgage cases in illegal tribunals
(February 4, 2015)
- Mortgage debtors are waiting in vain for their cases to be heard by the courts.
(January 28, 2015)
- Complaint about application of Union law by Hungary
(January 5, 2015)
- Hungarian government breaches European Convention on Human Rights (ECHR) in order to force consumers to adhere to void mortgage agreements.
(September 18, 2014)
- The Hungarian parliament passes a bill with the aim of providing relief to tens of thousands of consumers who have foreign currency mortgages.
(July 24, 2014)
- The Hungarian OTP Bank Nyrt is hiding a risk of approx. € 10 billion from the eyes of its investors
(January 08, 2014)
- Szász warns of panic if banks lose mortgage lawsuits
(June 18, 2013)
- Press release – Hungary: Political radicalisation is on the rise due to systematic judicial error of the courts
(March 20, 2013)
- All mortgage contracts may be invalid
(January 16, 2013)
- Foreign currency mortgage contract ruled to be invalid by court
(January 3, 2013)
- Court rules against OTP
(December 19, 2012)
- Press release – Hungarian banks originated foreign currency consumer loans illegally for years, regulators failed to discover misconduct
(November 23, 2011)
Pénzügyi Ismeretterjesztő és Érdek-képviseleti Egyesület (PITEE) is an independet consumer protection association established under Hungarian law. The association was founded in 2008. The Chairman is Dr.xDenesyLazar. He is qualified as “Rechtsanwalt” in Germany, and as Solicitor in Engaland and Wales.