PITEE Consumer Protection Association
for Financial Services
Our mission is to enforce consumer rights and bring about fundamental change in Hungarian legal culture by promoting and defending democracy, free competition, EU standards, transparency and the rule of law – all values not shared by the Hungarian government and oligarchy.
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
Press Release no. 25
Budapest, January 25, 2018
We are deeply concerned about the protection of human rights by the European Court of Justice. The recently published opinion of the Advocate General in Case C-483/16 (Sziber) overlooks a grave violation of the fundamental values of the Union by the Hungarian Parliament. We call upon the judges of the European Court of Justice to conduct a critical review of the opinion and ensure that the Court’s decision upholds the principles of legal certainty, the prohibition of arbitrariness of the executive powers, and the right of access to a court.
The subject matter of Case C-483/16 is whether Union law precludes national rules that introduce new admissibility requirements for legal actions with retroactive effect.
According to Union law, consumers have a right to effective legal remedies to prevent the use of unfair terms in consumer contracts. Under the former Hungarian legal framework consumers’ actions were admissible to the courts if their purpose was solely to declare the invalidity of a consumer contract or any part of it.
In October 2014 the Parliament enacted new admissibility requirements. Under this new legal framework consumers’ claim requests must specify the legal and monetary consequences of the invalidity of a given consumer contract or any part of it.
These new requirements apply only to consumer claims that arise out of or in connection with foreign currency loan agreements concluded before the publication of the new law (see Legal Opinions of the European Central Bank No. CON/2014/72 dated 10.10.2014 and No. CON/2014/59 dated 28.07.2014).
The new legislation entered into force on 1st November 2014 without any transition period. Courts are obliged to dismiss all pending legal actions unless the debtors change their claim requests. Furthermore, the courts are prohibited from opening proceedings under the formal legal framework.
The Hungarian Government argues that the new law provides “more favourable” protection for foreign currency loan debtors under the scope of the directive.
In fact the introduction of new admissibility criteria with retroactive effect is a grave violation of the fundamental values of the Union.
Legislation with retroactive effect violates the principle of legal certainty. The legislation especially ignores the legitimate expectations of consumers. As the law does not provide for a transition period, consumers have no chance to decide whether the old or the new framework is more favourable in their own particular case.
Legislation that changes the admissibility requirements of pending proceedings is arbitrary because it intervenes in the private activities of banks and consumers without a legal basis and without justification. The Government’s stated aim of raising the level of consumer protection is questionable because it is unclear why legal protection will become “more favourable” for consumers if they are required to calculate the financial impact of the full or partial invalidity of a sophisticated financial product before they can request legal protection.
Legislation that obliges courts to dismiss pending actions is a violation of the right of access to a court. The guarantees laid down by Article 6(1) of the European Convention of Human Rights guarantee not only the right to institute proceedings but also the right to obtain a determination of a dispute by a court.
The Hungarian Government is using legislative measures to put an end to consumer claims in relation to unfair provisions in foreign currency loan contracts. Many Hungarian judges consider such measures antithetical to democratic values, but the Hungarian Constitutional Court and the Supreme Court “Kúria” are backing the agenda of the Government. Hungarian judges in ordinary courts need the support of their European colleagues in order to withstand the Government’s pressure.
We call upon the judges of the European Court of Justice to conduct a critical review of the opinion of the Advocate General in Case C-483/16 (Sziber). The decision of the Court could become an important milestone in the process of modernisation of the Hungarian judiciary.
Download this press release in a PDF
7. Press Review
- Opinion of the Advocate General in Case C-483/16 (Sziber)
(January 25, 2018)
- Open Letter to Mr Thorbjørn Jagland, Secretary General of the Council of Europe
(16 November, 2017)
- Open Letter to Mr Koen Lenaerts President of the Court of Justice
(6 November, 2017)
- Open Letter to Mr Frans Timmermans, Commissioner, First Vice-President of the European Commission
(26 October, 2017)
- Election of a Hungarian Judge to the European Court of Human Rights
(January 10, 2017)
- Budapest Metropolitan Court rejects a claim of consumer protection organization PITEE concerning the annual report of the OTP Bank
(December 2, 2016)
- Hungarian Government nominates three candidates to the European Court of Human Rights
(September 7, 2016)
- Hungarian Consumers are bringing a new violation of their human rights to the attention of the European Court of Human Rights
(August 31, 2016)
- Hungarian Government ignores recommendations regarding the nomination process for candidates to the European Court of Human Rights
(August 3, 2016)
- 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.