§ 5-5. Consequences when the bank breaches the duty to assess creditworthiness or the duty to refuse credit

This section is the sanction rule for the credit assessment and the duty to refuse credit. If the bank has not assessed the customer's creditworthiness under § 5-2, or has granted a loan in breach of § 5-4, the consumer gets stronger protection on three points.

First, the bank cannot use the duty to limit loss against the consumer. This duty is set out in § 3-49 fourth paragraph. It states that compensation (erstatning) can be reduced if the injured party has failed to limit the loss, but subject to § 5-5. Second, two types of terms are not binding. One is terms on losses from early repayment of a fixed-rate loan (fastrentekreditt) under § 2-10. The other is the terms on insurance and account agreement (kontoavtale) that § 5-8 third sentence permits. Instead, the customer can demand the market interest rate.

The second paragraph applies when the bank has granted credit in breach of § 5-4. In that case, the customer's obligations can be reduced to the extent that is reasonable. In the assessment, weight may be given to how the result of the credit assessment was communicated, and whether the bank has otherwise fulfilled the duty to explain under § 5-1. The bank therefore cannot expect to get off simply because the customer received money.

The third paragraph protects the customer against the bank using an error in its own credit assessment as a pretext. The bank cannot terminate or change the agreement to the customer's detriment on those grounds. The exception is where the error is due to circumstances on the customer's side and at the same time gives a right of termination under § 3-51, for example where information has deliberately been withheld or falsified.

The rules build on §§ 5-1 to 5-4 of the chapter, and § 6-1 refers to this section for personal guarantees (kausjon). Example: The bank has granted a loan to a consumer without assessing creditworthiness. Later, the bank wants its losses covered on early repayment of a fixed-rate loan. The term on loss compensation is then not binding on the customer, who only needs to pay the market interest rate.