Fava agreed to return more than $287 million to clients for irregular collections on their loans

2023-10-25 01:25:39

The Justice of Mar del Plata approved the transactional agreement reached by the Fava Group with the Association for the Defense of User and Consumer Rights (Adduc) to end the million-dollar process of returning money to the thousands of clients who had sued, through the organization, the local financial company for execute irregular collections within the framework of personal loans granted in recent years.

This Monday, Judge Heber Daniel Amalfi endorsed the agreement between the parties and thus put an end to the judicial dispute that began in 2019. The conflict arose from recurring queries and complaints from clients who accessed the Favacard SA personal loan service: they claimed that The firm credited less money than it had promised as a loan. After an investigation, it was determined that this was due to the collection – in the first installment – of a commission for “granting expenses”, which represented 3 percent of the loan.

In November of last year, Justice ruled in favor of the class action lawsuit initiated by Adduc, representing 78,069 people from Mar del Plata and the area that They had accessed 209,026 credits between 2014 and 2019, and in April the Court of Civil and Commercial Appeals of Mar del Plata ordered the Fava Group to begin making refunds. The appeal court accepted a proposal from the organization and granted Favacard’s appeal with “refundable effect”, so that the company was forced to comply with the corresponding payments despite having the appeal pending.

Thus, in recent months, some 2,524 thousand clients – according to the file – came to demand the amount that the historic Mar del Plata company charged them irregularly. And a couple of weeks ago, the representatives of the Association for the Defense of User and Consumer Rights and the financial company agreed on the conditions to finish making the deposits to the remaining universe of victims.

In any case, judicial authorities that the clients and former clients reached by the agreement “will have the right to withdraw and claim individually and in their own right what they consider to be theirs.” In that case, they must notify the intervening court within 30 calendar days from the date of publication of the notice in the Official Gazette.

What does the agreement say?

In the agreement to which he had access 0223Favacard and Favanet undertook to reimburse “those who had not personally presented themselves to claim payment of the judgment in the file, a sum of 77% of the charge for granting Favanet credit, within the period of 120 days” of the approval that signed by the head of the Civil and Commercial Court No. 1.

The refund must materialize automatically, depending on the situation of each victim. “Users who are currently holders of a Favacard credit card will see the accreditation reflected in the settlement of their credit card; those who have an outstanding personal loan with Favanet will receive a reduction in the amounts to be paid equivalent to the amount they are charged for. the agreement. Users who have ceased to be clients of Favacard or Favanet who had a demand account opened in their name in a bank in the financial system will see the accreditation reflected in their account,” it was detailed.

Details of the transactional agreement.

Although during the lawsuit larger amounts were considered regarding global economic damage, this agreement implies for the Fava Group a total disbursement of $287.301.815. The final sum was determined by accounting experts on June 21, 2023 and the interest will be updated at the rate established in the ruling until the payment date, to each corresponding client.

At the end of the planned period, the company promised to present an accounting certification with the total number of people reached by the transactional agreement who had received the full reinstatement of the position, and it was also anticipated that “the resulting sums will be donated to two or more public good entities with seat in the city of Mar del Plata”.

A long wait

The lawsuit began in 2019, after recurring queries and complaints from clients who accessed Favacard SA’s personal loan service: they claimed that the firm credited less money than it had promised in the loan. After an investigation, it was determined that this was due to the collection – in the first installment – of a commission for “granting expenses”, which represented 3 percent of the total loan.

Gabriel Martínez Medrano, lawyer for the Association for the Defense of User and Consumer Rights, stated that these maneuvers constituted an “illicit” and, through judicial means, demanded that the company repair the damage caused with the return of the corresponding percentage of money. After an extensive judicial labyrinth, Judge Amalfi ruled in November 2022 in favor of the lawsuit.

The magistrate recognized that the Mar del Plata financial company made room for an “abusive clause” and considered that “it failed to prove that the concept of ‘granting commission’ responds to the effective presentation of a service.” “It was never explained what it consisted of and/or why the fact of accepting the loan application constitutes a different and/or differentiated service from the loan itself,” he reproached, in his verdict.