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In the world of consumer creditThe law provides essential safeguards to protect consumers. These include the right of withdrawal, which is a bulwark against hasty commitments. Introduced under the Scrivener Act of 10 January 1978, this mechanism - also known as the right of repentance - offers a second chance to borrowers who have signed up too quickly.
1. The withdrawal period: a mandatory cooling-off period
The Consumer Code gives borrowers a period of fourteen completed calendar days in which to withdraw (article L. 312-19). This period begins on the day the offer of credit is accepted.
This legal deadline is not arbitrary. It corresponds exactly to that set out in European Directive 2008/48/EC of 23 April 2008, transposed into French law by the Act of 1 July 2010.
Two weeks is the time deemed necessary to take a step back after making a financial commitment, sometimes under commercial pressure.
A shorter deadline in certain cases
In certain circumstances, this period may be reduced to three days. Article L. 312-47 of the French Consumer Code allows this when the borrower expressly requests immediate delivery of the goods.
To do this, he or she must sign the contract with a specific handwritten note, as provided for in article R. 312-20 of the Code, certifying that:
- His knowledge that his main sales contract will be definitive on the fourth day
- His acceptance of a reduced withdrawal period
Case law is strict on this point. In the absence of a corresponding handwritten note, the consumer retains the normal period of fourteen days (Cass. 1re civ., 19 May 1992).
2. How do I exercise my right of withdrawal?
There are a number of specific procedures for exercising the right of withdrawal.
The detachable form
Article L. 312-21 of the French Consumer Code requires the credit offer to contain a detachable withdrawal form. This document must comply with the model annexed to article R. 312-9, thus constituting an essential component of the credit offer. rules governing the formation of credit agreements.
Beware of case law on this form: the Cour de cassation requires that it contains no information other than that required by law. In a ruling dated 8 July 1997, the Court ruled against the inclusion of an advertising slogan on the form.
The borrower is not obliged to use this specific form. The most important thing is that the borrower clearly states his or her intention to waive the credit applied for, but the form makes it easier to prove this.
Proof of withdrawal
To be on the safe side, the form or any document expressing the wish to withdraw should be sent by registered letter with acknowledgement of receipt.
A recent ruling on 21 October 2020 overturned previous case law concerning proof of delivery of the withdrawal form. The pre-printed phrase " I acknowledge that I am still in possession of a copy of this offer with a detachable withdrawal form. "It is merely an indication that the lender must corroborate with other evidence (Cass. 1re civ., 21 Oct. 2020, no. 19-18.971).
Where should I send my withdrawal?
The right of repentance must normally be exercised with the credit organisation.
However, case law accepts that the consumer may also withdraw from the seller (Cass. 1re civ., 12 Feb. 1991). The Cour de cassation considers that the seller who delivers the offer of credit on behalf of the financial institution is its agent. The consumer may therefore legitimately believe that this seller is authorised to receive his withdrawal.
3. The effects of withdrawal
The consequences of exercising the right of withdrawal are significant.
On the credit agreement
Withdrawal renders the credit agreement null and void. The borrower is released from all obligations towards the lender. Case law considers this to be a contract entered into subject to a resolutory condition (Cass. 1re civ., 10 June 1992).
On the main contract in the case of affected credit
In the case of a affected credit (financing a specific good or service), article L. 312-52 of the French Consumer Code stipulates that the main sales contract is also automatically cancelled if the borrower exercises his or her right of withdrawal within the deadline.
This automatic cancellation does not apply if the buyer pays cash before the expiry of the time limit. But beware: this cash payment must be a free and voluntary act on the part of the consumer, who cannot be forced to do so by a clause in the contract (article L. 341-11 of the French Consumer Code).
4. No payments during the cooling-off period
To ensure that this right of withdrawal is effective, article L. 312-25 of the French Consumer Code prohibits any payment for seven days from acceptance of the credit agreement.
This ban concerns :
- Payments from the lender to the borrower
- Payments from the borrower to the lender
- Any deposit in favour of the lender
Case law specifies that even the simple handing over of a cheque constitutes a prohibited payment (Cass. crim., 12 Dec. 1991).
If the seller or lender breaches this prohibition, they are liable to the criminal penalties set out in article L. 341-12 of the French Consumer Code.
5. Cancellation of the right of withdrawal
While the right of withdrawal is an important protection, it can be undermined by certain practices.
In practice, certain professionals may try to circumvent this time limit, in particular :
- Having people sign acknowledgements that they have submitted the form without actually having done so
- By persuading the consumer to waive this time limit
- Backdating documents
These practices, when proven, can lead to a forfeiture of interest for the lender (article L. 341-4 of the French Consumer Code).
The right of withdrawal remains a powerful tool, but its effectiveness often depends on the borrower's vigilance. In the event of a dispute over the exercise of this right, the involvement of specialist legal advice may prove decisive in ensuring that this legal protection is respected.
A specialist law firm will be able to analyse the contractual documents, check compliance with legal formalities and build the arguments needed to defend the rights of borrowers who have encountered difficulties in exercising their right of withdrawal.
Sources
- Consumer Code: articles L. 312-19, L. 312-21, L. 312-25, L. 312-47, L. 312-52, L. 341-4, L. 341-11, L. 341-12
- Consumer Code: articles R. 312-9, R. 312-20
- Cass. 1re civ. 19 May 1992 (reduced cooling-off period)
- Cass. 1re civ. 8 July 1997 (detachable form)
- Cass. 1re civ., 12 Feb. 1991 (withdrawal from seller)
- Cass. crim., 12 Dec. 1991 (cheque remittance)
- Cass. 1re civ. 10 June 1992 (legal nature of the contract)
- Cass. 1re civ., 21 Oct. 2020, no. 19-18.971 (proof of delivery of slip)
- European Directive 2008/48/EC of 23 April 2008
- Law no. 2010-737 of 1 July 2010 reforming consumer credit
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