Hungary’s Supreme Court extends abuse-of-rights doctrine to consumer complaints

Hungary’s top court has ruled that the general prohibition on abuse of rights applies to financial consumer protection, establishing a precedent that affects how complaint-handling obligations are interpreted across the sector.

The decision by the Hungarian Supreme Court confirms that consumers’ rights, including the right to file complaints, may be exercised in an abusive manner and therefore may not trigger the usual legal consequences.

The case originated from a dispute between a credit institution and a former client who, after terminating all contractual relations, continued to submit a large volume of complaints, repeatedly contact the institution’s call centre and visit its branches. The institution concluded that the behaviour was excessive and intended to exert pressure, and therefore declined to provide substantive responses.

The matter was brought before the Central Bank of Hungary in its supervisory capacity. The authority initially held that sector-specific regulations did not allow consideration of abuse of rights in complaint handling, meaning the institution remained obliged to respond.

That position was upheld by lower courts. However, the Supreme Court overturned both the administrative decision and earlier rulings, stating that authorities must assess whether procedural rights are exercised in good faith and prevent their misuse.

The court noted that the prohibition of abuse of rights applies across the legal system and extends even to fundamental procedural rights, including the right to administration and the right to lodge complaints.

The ruling is expected to have broader implications for financial institutions and other service providers subject to statutory complaint-handling obligations, including insurers and investment firms. Consumer protection authorities will now be required to assess whether complaints are submitted in line with their intended legal purpose.

In practical terms, the decision allows service providers to introduce safeguards within their complaint-handling processes to address submissions deemed abusive or made in bad faith.

The judgment may also prompt legislative changes to formally incorporate the abuse-of-rights principle into complaint-handling regulations, providing clearer guidance for both consumers and service providers.

The credit institution in the case was represented by the litigation team of CMS.

Source: CMS