Poland - Consumer Credits - Report of UOKiK
147 standard forms of agreements, 31 inspected undertakings, 26 proceedings, 17 actions brought to court – these are results of actions taken by the President of UOKiK in response to law breaches. Standard forms of agreements and loan advertisements were under examination.
The inspection covered the period March-November 2012 and was divided into two stages – first was the analysis of standard forms of agreements, the second regarded the press and online advertising. Undertaking under scrutiny were taken at random. 20 undertakings were under examination: - banks (11), parabanks (4), SKOK (Cooperative Savings and Credit Unions; pl. Spółdzielcza Kasa Oszczędnościowo-Kredytowa) (5). The analysis of advertisements covered 16 undertakings, respectively: banks (6), parabanks (9), and SKOK (1).
Results
The Office challenged the practice of 28 undertakings and instituted 26 proceedings. The President of UOKiK is going to bring 17 actions to the court to regard the clauses contained as abusive. In most cases credit grantors find it difficult to specify the reasons for the change of interest rate correctly as well as determine the conditions for the change in charges collected from clients.
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The Office examined 17 advertisements by 16 undertakings and put 10 of them in question. Credit grantors failed inter alia to give details of all the required data concerning the cost of credit - they pointed only the real annual interest rate instead, or instalment value with no details of a total credit value to be paid. For example, one of offers announced the following: 30 thousand – PLN 184.00.The advertisement contained the exemplary instalment only, it did not provide any other costs of loan. Under the law, whenever a credit grantor presents the cost of credit, it must take into consideration many other pieces of information, e.g. credit interest rate, the total credit value to be paid off, or real annual interest rate. Consequently, the President of UOKiK instituted 7 proceedings in this respect.
Information form
Under the law, the information on the cost of loan contains a special form which a credit grantor must give to a consumer. This enables a handy 
comparison of offers presented by various undertakings. In fact, the Act on consumer credit does not set the deadline until which the offer must remain valid, however, the information should be presented to a consumer early enough to go through it in detail.
The irregularities contained incomplete forms (3 undertakings) – the forms were unclear, not all blanks were filled in, and not all charges were indicated. Moreover, 9 credit grantors determined the validity date of the form as too short – in most cases the offer was binding for a day. According to the President of UOKiK, such a short deadline does not give grounds to make an informed consumer decision. The President of UOKiK initiated proceedings against 9 undertakings infringing the provisions concerning the information form.
Change in interest rates and fees
The President of UOKiK was concerned about imprecise clauses giving grounds for changing interest rates and fees collected by a credit grantor. Based on them undertakings may alter costs at their discretion and at any time of contract duration. They do not specify any particular reasons, frequency of such practice or the volume of rise. Added to that, according to the condition restricted by one of undertakings, in the event of decreasing rates of credit on collateral of NBP (the National Bank of Poland), a consumer had to personally address the bank to decrease the interest rate, otherwise the credit grantor charged it at standard rates, i.e. higher than maximum rate. Under the law, any change of economic factors should automatically affect the interest rate.
13 undertakings applied clauses employing not homogenous specification of terms for the change in interest rates or fees. Consequently, the President of UOKiK instituted proceedings concerning the violation of collective consumer interests or will bring an action to the court to regard the clauses as abusive.
Withdrawal from contract
Objections were raised against the practice applied by an undertaking who insisted on keeping the charge paid for drawing up the loan contract in the event of its termination. These costs contain among others the counseling, keeping contact record, drafting and considering the application. According to UOKiK, neither contract clauses nor signals from consumers confirm that these costs were refunded - it could have resulted from deliberate retaining of initial payments. As a consequence, the President of UOKiK intends to institute proceedings in this case.
Proposals of legal changes
The inspection revealed that credit grantors interpret the provisions of the newly amended Act on consumer credit really variously. Taking into account doubts emerging on the market, our experiences and information contained in consumer complaints, we have worked out some proposals of legal changes. One of them concerns determining the minimum binding period of the data included in the information form. Some credit grantors apply the period insufficiently long to allow a consumer for comparing offers. Another proposal regards e.g. standarizing concepts such as total credit value, or interest rate. Furthermore, the industry emphasised how vital it is to precisely stipulate the obligation of containing in a contract the data on conditions for its termination.
Don’t be cheated. Check before you sign.
Are you already deciding which credit grantor to choose? Maybe you do not know what to consider when borrowing money before Christmas? Please follow www.zanim-podpiszesz.pl (available in Polish only) – a consumer will find here basic information on risky loopholes applied by credit grantors, may use a special calculator to estimate the cost of loan, or learn new rules for reasonable money borrowing. When making financial decisions, consumers may also find useful answers to FAQs, prepared especially for them. Additionally, free assistance is provided by the Polish Consumer Federation at 800 007 707, at its local branch offices, or by sending questions to the address porady@dlakonsumentow.pl, which is handled by the Association of Polish Consumers. Moreover, consumers may seek free of charge assistance concerning concluding agreements with financial institutions at the poviat and municipal consumer ombudsmen.