French consumer protection group UFC-Que Choisir has filed the country's first class action lawsuit against property giant Foncia alleging the firm has collected €44 million in illicit charges from renters in the past five years alone.
The action came on Wednesday the very day class action suits became legal in France. The lawsuits allows groups of individuals to collectively sue a defendant or group of defendants, without separately having to file a case and hire a lawyer.
This kind of suit is already common in the United States in cases against tobacco companies and car manufacturers for its ability to prompt changes in laws and practices.
At stake here is the allegation Foncia, considered the largest property manager in France, charged renters for sending them monthly rent bills. According to UFC-Que Choisir this practice has been illegal in France since 1989.
The fee is €2.30 per month, which comes out to €27.60 per year, when multiplied by the estimated 318,000 renters the agency handles per annum it adds up to €44 million in “fraudulent profits,” UFC-Que Choisir wrote in a statement.
Foncia did not immediately respond to a request for comment from The Local.
At the time he proposed legalizing class actions suits, then Minister of Consumer Affairs Benoit Hamon labelled them a “weapon of mass deterrence” against fraud, price-fixing and other consumer violations, in an interview with French daily L’Express.
“For 20 years, employers’ organizations have been blocking this democratic progress, and for 20 years the French consumer has been under-protected,” Hamon told L’Express when announcing the proposal in 2013.
During their tenures, former presidents Jacques Chirac and Nicolas Sarkozy both unsuccessfully attempted to establish class action lawsuits. Hamon’s proposal, which offered a more limited version of class action litigation than is found in the United States, only allows 16 consumer groups in France to pursue these types of cases.