1 This request for a preliminary ruling concerns the interpretation of Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC (OJ 2008 L 133, p. 66).
2 The request has been made in proceedings between Nárokuj s.r.o. and EC Financial Services, a.s., concerning the return of sums linked to credit it had granted to a consumer.
3 Recitals 7, 9 and 26 of Directive 2008/48 read as follows: ‘(7) In order to facilitate the emergence of a well-functioning internal market in consumer credit, it is necessary to make provision for a harmonised Community framework in a number of core areas. … … (9) Full harmonisation is necessary in order to ensure that all consumers in the Community enjoy a high and equivalent level of protection of their interests and to create a genuine internal market. … … (26) Member States should take appropriate measures to promote responsible practices during all phases of the credit relationship, taking into account the specific features of their credit market. Those measures may include, for instance, the provision of information to, and the education of, consumers, including warnings about the risks attaching to default on payment and to over-indebtedness. In the expanding credit market, in particular, it is important that creditors should not engage in irresponsible lending or give out credit without prior examination of creditworthiness, and the Member States should carry out the necessary supervision to avoid such behaviour and should determine the necessary means to sanction creditors in the event of their doing so. … [C]reditors should bear the responsibility of checking individually the creditworthiness of the consumer. To that end, they should be allowed to use information provided by the consumer not only during the preparation of the credit agreement in question, but also during a long-standing commercial relationship. The Member States’ authorities could also give appropriate instructions and guidelines to creditors. Consumers should also act with prudence and respect their contractual obligations.’
4 Article 8 of that directive, entitled ‘Obligation to assess the creditworthiness of the consumer’, provides: ‘1. Member States shall ensure that, before the conclusion of the credit agreement, the creditor assesses the consumer’s creditworthiness on the basis of sufficient information, where appropriate obtained from the consumer and, where necessary, on the basis of a consultation of the relevant database. Member States whose legislation requires creditors to assess the creditworthiness of consumers on the basis of a consultation of the relevant database may retain this requirement. 2. Member States shall ensure that, if the parties agree to change the total amount of credit after the conclusion of the credit agreement, the creditor updates the financial information at his disposal concerning the consumer and assesses the consumer’s creditworthiness before any significant increase in the total amount of credit.’
5 Article 23 of that directive, entitled ‘Penalties’, provides: ‘Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive.’
6 Paragraph 86 of zákon č. 257/2016 Sb., o spotřebitelském úvěru (Law No 257/2016 on consumer credit), as amended by zákon č. 96/2022 Sb. (Law No 96/2022) (‘Law No 257/2016 on consumer credit’), provides: ‘(1) Prior to the conclusion of a consumer credit agreement or prior to a change in an obligation arising from such an agreement, which consists of a significant increase in the total consumer credit amount, the creditor shall assess the consumer’s creditworthiness on the basis of necessary, reliable, sufficient and appropriate information obtained from the consumer and, where necessary, on the basis of a consultation of a database that makes it possible to assess the consumer’s creditworthiness or on the basis of other sources. The creditor shall grant the consumer credit only if the results of the creditworthiness examination show that there is no reasonable doubt as to the consumer’s ability to repay the consumer credit. (2) When assessing the consumer’s creditworthiness, the creditor shall assess, in particular, the consumer’s ability to pay the agreed regular consumer credit repayments, on the basis of a comparison of the consumer’s income and expenses and the manner of repayment of his or her existing debts. The value of assets shall be taken into account only if it follows from the consumer credit agreement that the consumer credit is to be paid off, in part or in full, from the proceeds of the sale of the consumer’s assets, rather than by regular repayments, or if it follows from the consumer’s financial position that he or she will be able to repay his or her consumer credit regardless of his or her income.’
7 Paragraph 87(1) of that law reads as follows: ‘If a creditor grants consumer credit to a consumer in breach of the second sentence of Paragraph 86(1), the agreement is void. A court shall take the agreement’s invalidity into account of its own motion. The consumer shall return the consumer credit principal within a period appropriate to his or her abilities.’
8 A consumer entered into a consumer credit agreement for 50000 Czech koruny (CZK) (approximately EUR 2000) with JET Money s.r.o., a company which was succeeded in title by EC Financial Services. Prior to entering into the agreement, the consumer provided a certain amount of information relating to his personal and financial situation. He subsequently paid off the loan, with the amount paid being CZK 85000 (approximately EUR 3500), which included the ancillary costs of the loan. He did not raise any objections about the agreement during the period of repayment of the credit.
9 Nárokuj, the applicant in the main proceedings, is a commercial company to which the consumer has assigned the claims he could have asserted against the creditor under the consumer credit agreement. Before the Okresní soud Praha-západ (District Court, Prague-West, Czech Republic), the referring court, the company argued that the agreement was null and void on the grounds that the creditor had failed in its duty to examine the consumer’s creditworthiness. As part of its claim based on unjust enrichment, it seeks payment of CZK 35000, which represents the difference between the loan principal and the amount paid, plus statutory default interest.
10 EC Financial Services, the defendant in the main proceedings, takes the view that the consumer’s creditworthiness has been fully examined and that, in any case, the consumer protection rules do not apply since the claim at issue in the main proceedings is no longer held by a consumer but by a commercial company.
11 In the light of those arguments, the referring court is uncertain whether, under Directive 2008/48, a creditor may be penalised where failure to fulfil its obligation to examine a consumer’s creditworthiness prior to the conclusion of a credit agreement has not resulted in any harmful consequences for the consumer. In that regard, it points out that, while certain national courts have answered that question in the affirmative even where the credit at issue has been repaid in full and without objection on the part of the consumer, a contrary interpretation, based on a balance of the interest of both parties to the agreement and also with a view to the fact that the consumer is responsible for his or her actions, seems conceivable.
12 In addition, the referring court observes that the purpose of Article 8 of Directive 2008/48 is to keep a consumer out of financial trouble in repaying his or her credit, so that it could be held that the obligation on the creditor to examine the consumer’s creditworthiness is not the main purpose of that directive, but rather a means whereby its purpose is to be attained.
13 In addition, the Court considers that the creditworthiness of a consumer cannot be examined in isolation, solely on the basis of the information that the creditor requests from the consumer, but must also be examined on the basis of how the entire contractual relationship developed in terms of the objective of consumer protection pursued by Directive 2008/48.
14 Lastly, particular account should be taken of the principles of legal certainty and good faith, in so far as a creditor that has granted credit to a consumer which the latter has subsequently repaid must be able to have confidence in the fact that, through his or her payments, the consumer has discharged his or her contractual debt. If the consumer had not suffered any harmful consequences, there would be no need to apply a penalty for the sole purpose of prevention.
15 In those circumstances, the Okresní soud Praha-západ (District Court, Prague-West) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘Is the purpose of Directive [2008/48] to penalise credit providers for a failure to fully examine a consumer’s creditworthiness, even in cases when the consumer fully paid up the credit and raised no objections against the agreement while paying?’
16 The European Commission states that the question referred for a preliminary ruling is hypothetical, on the grounds that the premiss on which it is based, namely that the examination of the creditworthiness of the consumer concerned was not carried out in accordance with Article 8(1) of Directive 2008/48 or the national provisions transposing that provision, is incorrect. The order for reference does not contain any evidence to suggest that that examination was in fact inadequate.
17 In that respect, it should be noted that, according to settled case-law, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgments of 14 July 2022, Volkswagen, C‑134/20, EU:C:2022:571, paragraph 56 and the case-law cited, and of 31 January 2023, Puig Gordi and Others, C‑158/21, EU:C:2023:57, paragraph 50 and the case-law cited).
18 It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, or where the problem is hypothetical (see, to that effect, judgments of 14 July 2022, Volkswagen, C‑134/20, EU:C:2022:571, paragraph 57 and the case-law cited, and of 31 January 2023, Puig Gordi and Others, C‑158/21, EU:C:2023:57, paragraph 51 and the case-law cited).
19 However, that is not the position in the present case.
20 It is apparent from the order for reference that the questions referred by the referring court are based on the scenario, put forward by Nárokuj and contested by EC Financial Services, in which the latter failed to fulfil its obligation to examine the consumer’s creditworthiness under Paragraph 86 of Law No 257/2016 on consumer credit, in particular on the ground that it did not in any credible manner test the actual amount of expenses of the consumer concerned.
21 In that regard, it should be recalled that Directive 2008/48 does not contain an exhaustive list of the information on the basis of which the creditor must examine the consumer’s creditworthiness (see, to that effect, judgment of 18 December 2014, CA Consumer Finance, C‑449/13, EU:C:2014:2464, paragraph 36).
22 Consequently, the question of whether the creditor has, in the circumstances of the main proceedings, complied with its obligation under Article 8 of Directive 2008/48 is essentially a matter of assessment of the requirements laid down for that purpose by national law.
23 It is not for the Court, in the context of the procedure laid down in Article 267 TFEU, to rule on the interpretation of national law and to determine whether the interpretation given by the national court is correct, since, in the context of that procedure, which is based on a clear separation of functions between the national courts and the Court, any assessment of the facts and of national law is a matter for the national court alone (see, to that effect, judgments of 16 March 2023, Caixabank (Loan arrangement fees), C‑565/21, EU:C:2023:212, paragraph 37 and the case-law cited, and of 4 May 2023, Bundesrepublik Deutschland (Court electronic mailbox), C‑60/22, EU:C:2023:373, paragraph 40 and the case-law cited).
24 In those circumstances, it is not manifestly apparent that the interpretation of Directive 2008/48 that is sought bears no relation to the actual facts of the main action or its purpose, or that the problem raised is of a hypothetical nature within the meaning of the case-law referred to in paragraph 18 of the present judgment.
25 It follows that the question referred for a preliminary ruling is admissible, it being understood that it will be for the referring court to determine whether, in the main proceedings, the creditor has in fact failed to fulfil its obligation pursuant to Article 8 of Directive 2008/48.
26 By its question referred for a preliminary ruling, the referring court asks, in essence, whether Articles 8 and 23 of Directive 2008/48 must be interpreted as precluding, where the creditor has failed to fulfil its obligation to examine the consumer’s creditworthiness, that creditor from being penalised, in accordance with national law, by the consumer credit agreement being void and its entitlement to payment of the agreed interest being forfeited, even though that agreement has been fully performed by the parties and the consumer has not suffered any harmful consequences as a result of that failure to fulfil the obligation.
27 It should be observed, as a preliminary point, that the fact that the dispute in the main proceedings is only between sellers or suppliers does not preclude the application of Directive 2008/48 in the context of the present dispute. The Court has already ruled that the scope of that directive is not dependent on the identity of the parties to the dispute at issue, but on the capacity of the parties to the credit agreement (judgment of 11 September 2019, Lexitor, C‑383/18, EU:C:2019:702, paragraph 20).
28 It is apparent from the order for reference that the claim which is the subject matter of the main proceedings is based on the repayment obligation arising from the conclusion of the consumer credit agreement concluded between a consumer and JET Money, which was succeeded by EC Financial Services, and that that claim was assigned by that consumer to Nárokuj after the credit had been repaid.
29 That being so, it should be noted that the questions raised by the referring court may be understood as relating both to the potential regularisation of an alleged breach of Article 8 of Directive 2008/48 by reason of the performance in full of the credit agreement and to the compliance with Article 23 of that directive of the measures provided for by Czech law to penalise such a breach. In order to provide a useful answer to the question referred for a preliminary ruling, it is necessary to consider those two aspects in turn.
30 With regard, first, to the potential regularisation of a breach of Article 8 of Directive 2008/48 as a result of the full performance of the credit agreement, it should be noted that, when interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it forms part (see, to that effect, judgment of 8 June 2023, YYY. (Concept of consumer), C‑570/21, EU:C:2023:456, paragraph 28 and the case-law cited).
31 It is clear from the wording of Article 8(1) of Directive 2008/48 that the creditor must examine the consumer’s creditworthiness prior to the conclusion of a credit agreement. The Court has already emphasised the pre-contractual nature of that obligation (see, to that effect, judgment of 18 December 2014, CA Consumer Finance, C‑449/13, EU:C:2014:2464, paragraph 45).
32 That circumstance alone does not, however, make it possible to determine whether, and, if so, under what conditions, the full performance of the credit agreement may remedy the existence of a breach of the creditor’s obligation to examine the consumer’s creditworthiness, especially since Directive 2008/48 does not determine either the manner in which the creditor must discharge that obligation (see, to that effect, judgment of 18 December 2014, CA Consumer Finance, C‑449/13, EU:C:2014:2464, paragraph 36), or the obligations imposed on it in relation to the result of the evaluation (see, to that effect, judgment of 6 June 2019, Schyns, C‑58/18, EU:C:2019:467, paragraphs 42 and 43).
33 As regards consideration of the objectives pursued by Directive 2008/48, it is settled case-law that the obligation to examine the consumer’s creditworthiness laid down in Article 8 of that directive, in so far as it seeks to protect consumers against the risks of over-indebtedness and insolvency, contributes to attaining the objective of that directive, which consists, as is apparent from recitals 7 and 9 thereof, in providing for full and mandatory harmonisation of consumer credit in a number of key areas, which is regarded as necessary in order to ensure that all consumers in the European Union enjoy a high and equivalent level of protection of their interests and to facilitate the emergence of a well-functioning internal market in consumer credit (judgments of 27 March 2014, LCL Le Crédit Lyonnais, C‑565/12, EU:C:2014:190, paragraph 42, and of 5 March 2020, OPR-Finance, C‑679/18, EU:C:2020:167, paragraph 21).
34 Moreover, the Court has repeatedly held that, having regard to recital 26 of Directive 2008/48, that obligation is also intended to hold creditors accountable and to prevent the granting of loans to consumers who are not creditworthy (see, to that effect, judgments of 18 December 2014, CA Consumer Finance, C‑449/13, EU:C:2014:2464, paragraph 35; of 5 March 2020, OPR-Finance, C‑679/18, EU:C:2020:167, paragraph 20; and of 10 June 2021, Ultimo Portfolio Investment (Luxembourg), C‑303/20, EU:C:2021:479, paragraph 28).
35 It follows, first, that the creditor’s obligation to examine the consumer’s creditworthiness is intended to prevent the mere risk of over-indebtedness or insolvency resulting from insufficient verification of the consumer’s ability and propensity to repay the credit. Such financial consequences of the conclusion of a credit agreement on the consumer’s situation may also occur after the credit has been repaid.
36 Secondly, holding creditors accountable and preventing irresponsible practices when granting credit to consumers are essential to the smooth operation of the consumer credit market. Since those purposes are independent of the situation or behaviour of an individual consumer, they are not achieved by the mere fact of the full performance of the credit agreement entered into by that consumer. Any other interpretation would encourage non-compliance by the creditor with its obligation pursuant to Article 8 of Directive 2008/48 and would be likely to deprive that provision of its useful effect.
37 As a result, an analysis based on the purposes of Article 8 of Directive 2008/48 leads to the conclusion that a breach of the creditor’s obligation to examine the consumer’s creditworthiness, as provided for in that provision, cannot be regularised merely by the credit agreement being performed in full. It is irrelevant that the consumer did not raise any objections about the agreement during the period of repayment of the credit.
38 It should also be pointed out that the findings set out in the previous paragraph are not called into question by paragraph 279 of the judgment of 21 December 2023, BMW Bank and Others (C‑38/21, C‑47/21 and C‑232/21, EU:C:2023:1014), in which the Court held that, since the performance of a contract constitutes the natural mechanism for extinguishing contractual obligations and in the absence of specific provisions in that regard, a consumer may no longer rely on the right of withdrawal conferred on him or her by Article 14(1) of Directive 2008/48 once the credit agreement has been fully performed by the parties and the mutual obligations arising from that agreement have, as a result, come to an end.
39 The fact that, after the credit agreement has been fully performed, the parties thereto are no longer in a position to rely on the mutual obligations arising from that agreement has no bearing on the existence of a claim based on an obligation to repay sums unduly paid arising from the application of national legislation which, in accordance with the requirements of Article 23 of that directive, penalises failure to comply with the creditor’s obligation to examine the consumer’s creditworthiness, as provided for in Article 8 of that directive.
40 Secondly, as regards the system of penalties applicable in the event of infringement of the national provisions adopted pursuant to Article 8 of Directive 2008/48, it is important to remember that, in accordance with Article 23 of that directive, that system must be defined in such a way as to ensure that the penalties are effective, proportionate and dissuasive (see, to that effect, judgment of 10 June 2021, Ultimo Portfolio Investment (Luxembourg), C‑303/20, EU:C:2021:479, paragraph 30 and the case-law cited).
41 To that effect, the severity of penalties must be commensurate with the seriousness of the infringements for which they are imposed, ensuring a genuinely deterrent effect without going beyond what is necessary to achieve the objectives pursued by Article 8 of Directive 2008/48 (see, to that effect, judgments of 5 March 2020, OPR-Finance, C‑679/18, EU:C:2020:167, paragraph 26, and of 14 October 2021, Landespolizeidirektion Steiermark (Gaming machines), C‑231/20, EU:C:2021:845, paragraph 45).
42 While it is for the referring court, which alone has jurisdiction to interpret and apply national law, to ascertain whether, having regard to all the circumstances of the main proceedings, the penalties at issue before it satisfy the requirements set out in the preceding paragraph, the Court, ruling on a reference for a preliminary ruling, may nevertheless provide clarification in order to guide it in its examination (see, to that effect, judgment of 5 March 2020, OPR-Finance, C‑679/18, EU:C:2020:167, paragraphs 27 and 28).
43 In the present case, it is apparent from the documents before the Court that, under Czech law, breach of the obligation on the creditor to examine the creditworthiness of the consumer, provided for in Paragraph 86 of Law No 257/2016 on consumer credit, is punishable by the credit agreement being void, as provided for in Paragraph 87(1) of that law, which entails forfeiture of the creditor’s entitlement to payment of the agreed interest.
44 The referring court, together with EC Financial Services and the Commission, essentially take the view that, where the credit agreement has been fully performed without the consumer having suffered any harmful consequences, the imposition of such a penalty would be disproportionate since it would go beyond what is necessary to achieve the objectives of Directive 2008/48.
45 In that respect, it should be borne in mind that it is for the Member States to take due account, when establishing an appropriate system of penalties applicable in the event of a breach by the creditor of its obligations under Directive 2008/48, of the extent of the harm caused to the consumer by the creditor’s conduct (see, by analogy, judgment of 16 April 2015, UPC Magyarország, C‑388/13, EU:C:2015:225, paragraph 58). Where there is a choice between several measures which are equally appropriate for achieving the objectives of that directive, the least restrictive measure should be chosen in accordance with the principle of proportionality, provided that, in any event, the disadvantages caused by the measure at issue are not disproportionate to those objectives (see, to that effect, judgment of 24 February 2022, Agenzia delle dogane e dei monopoli and Ministero dell’Economia e delle Finanze, C‑452/20, EU:C:2022:111, paragraphs 37 and 38 and the case-law cited).
46 In that regard, in the event that a credit agreement entered into by a consumer has been performed in full without the consumer having suffered any harmful consequences in the course of or as a result of that performance, the fact remains that, as is clear from paragraphs 33 and 34 of the present judgment, the obligation laid down in Article 8 of Directive 2008/48 is intended not only to protect consumers against such risks but also to hold creditors accountable and to prevent the granting of loans to consumers who are not creditworthy.
47 In the light of that dual purpose, the Court has already ruled that, in the light of the vital importance of that obligation in the context of Directive 2008/48, its breach may be penalised, in accordance with national law, by forfeiture of the creditor’s entitlement to interest (see, to that effect, judgment of 10 June 2021, Ultimo Portfolio Investment (Luxembourg), C‑303/20, EU:C:2021:479, paragraphs 39 and 40).
48 In addition, the Court has already ruled, in a case concerning the same national legislation as that at issue in the main proceedings, that a penalty involving, in the event of breach of the obligation to examine the consumer’s creditworthiness, forfeiture of the creditor’s entitlement to the agreed interest appears to be commensurate with the seriousness of the infringements for which it is imposed (see, to that effect, judgment of 5 March 2020, OPR-Finance, C‑679/18, EU:C:2020:167, paragraph 30).
49 It is important to note, first, that making the application of a penalty involving the credit agreement being void and the creditor’s entitlement to payment of the agreed interest being forfeited subject to the condition that the consumer has suffered a harmful consequence would be likely to encourage creditors to fail to comply with their obligation pursuant to Article 8 of Directive 2008/48. They could also be dissuaded from carrying out a systematic and exhaustive examination of the creditworthiness of all consumers to whom they grant credit, which would be contrary to the aims of making creditors accountable and preventing irresponsible practices when granting credit to consumers. Such an interpretation is, moreover, likely to undermine the genuinely dissuasive nature of the penalty.
50 Secondly, while the penalty at issue in the main proceedings may, in so far as it involves the cancellation of the credit agreement, undoubtedly have serious consequences for the creditor, that fact alone does not mean that the creditor would necessarily suffer disproportionate disadvantages in relation to the dual purpose pursued by Article 8 of Directive 2008/48 or, as EC Financial Services maintains in its written observations, that the risk of being exposed to those consequences even after repayment of the credit would constitute an infringement of the freedom to conduct a business.
51 It follows that, subject to the checks which it is for the referring court to carry out, the principle of proportionality does not preclude a Member State from choosing to penalise a breach of the national provisions transposing Article 8 of Directive 2008/48 by rendering the credit agreement null and void and forfeiture of the creditor’s entitlement to payment of the agreed interest, even though the consumer has not suffered any harmful consequences as a result of that breach.
52 In the light of the foregoing, the answer to the question referred for a preliminary ruling is that Articles 8 and 23 of Directive 2008/48 must be interpreted as not precluding, where the creditor has failed to fulfil its obligation to examine the consumer’s creditworthiness, that creditor from being penalised, in accordance with national law, by the consumer credit agreement being void and entitlement to payment of the agreed interest being forfeited, even though that agreement has been fully performed by the parties and the consumer has not suffered any harmful consequences as a result of that failure to fulfil the obligation.
53 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.