Poland - Collective research - Loan via internet

29 European countries reviewed 562 websites offering loans. The most common irregularity was failing to inform borrowers about the actual cost of credit.The Office of Competition and Consumer Protection participated in the research

This has been the fifth International Internet Sweep Day held by the European Commission which inspected undertakings offering their products and services online. So far, the reviewed websites concerned e.g. on-line sale of tickets and shops offering electronics and household appliances.

The latest research was initiated by 27 EU Member States, Norway and Iceland in September 2011. Altogether they reviewed 562 websites offering fast loans, thus putting in question 393 of them. The most common problem detected in the case of 258 websites was failing to provide complete information in the advertisement of consumer credit. It turned out that these offers did not provide information on the effective annual interest rate which determines the cost of credit, additional payments e.g. the insurance, or the life of a contract. A consumer lacking the knowledge is not able to compare competitive offers and consequently select the most favourable. Additionally, 244 websites did not inform about the essential components of the offer which may influence the final cost of loan, i.e.  the life of a contract or the preparatory charge. 116 websites misled consumers regarding the cost of credit.

Under the joint action UOKiK inspected the content of ten on-line advertisements by undertakings offering loans and instituted proceedings in four cases. Mainly the lack of information concerning the effective annual interest rate for the credit raised the concern of the President of UOKiK.

At the same time UOKiK reminds you that new conditions for granting consumer credits have been binding since 18th December 2011. It is worth noting that loans given before that time are governed by the previously binding provisions. What changes have been introduced?

14 days for withdrawing from the contract

The new provisions prolong the time provided for withdrawing from the contract to as much as 14 days from its conclusion. Additionally, a consumer will nor bear any costs connected with withdrawing from the contract, apart from the rates for the period between taking the credit to its final repayment. Whenever a consumer resigns from a contract, the credit grantor is entitled to no other payments except for the costs incurred for public administration bodies and the notarial fee.

Information form

The vital change is introducing the information form, which is to include all essential information concerning the credit, such as the cost of loan, the total value of repayment, the interest rate, required securities, obligatory insurances etc. Armed with such data, consumers can make a fully aware decision regarding the credit granted. Moreover, they can easily compare offers provided by different undertakings as the standard form was introduced in all  Member States.

Mortgage

The new provisions only slightly refer to mortgage, e.g. information provided to consumers. Right at the stage before concluding a contract, a consumer must be informed inter alia about the total credit value, own contribution required, terms and conditions for credit repayment, the total value of repayment and the cost of credit. In the case of agreement regarding credit index related to a foreign currency, the provided data includes additionally e.g. information on the method and time limits for fixing currency exchange rates, which essentially is the basis for calculating the value of granted credit as well as the rules for converting into the currency for withdrawal and the credit repayment. The whole data must be provided by the creditor on the information form.

Fees and commissions

The new stipulations suppressed the maximum 5 precent treshold of the total value of all payments, commissions and other costs regarding the conclusion of agreement on consumer credit. The mandatory form provides the previous access to complete information concerning all the costs. It allows for reaching  data regarding any costs incurred on the conclusion of an agreement. It serves not only to compare different offers but also to avoid taking risks of paying excessively high fees and commissions.

The earlier repayment

Credit granting institutions will be able to get a compensation in the case of earlier consumer credit repayment. Under the previous Act on consumer credit, the earlier repayment did not result in any other charges. However, the introduced amendment does not refer to all credits, but only to loans with fixed interest rate and only when the amount repaymed exceeds a particular value in the period of 12 months (in Poland – the triple average reimbursement in business sector acording to data by the Central Statistical Office).

Information in advertisements

In advertisements a  great emphasis was put on the way of communicaton with a potential client. Apart from the effective annual interest rate, a consumer must be provided with complete information whenever a creditor determines the cost of obtaing the loan, i.e. the total value of credit, interest rate with clearly distinguished fees included in the total value of credid.

Read the press release.