• UOKiK has issued decisions regarding early repayment of consumer loans.
• The Office decided that in such a situation the companies iCredit and Optima should proportionally reduce all loan-related costs borne by consumers.
• Entrepreneurs are obliged to immediately discontinue such practices.
• They are also required to recognize consumer complaints.

In September this year, the Court of Justice of the EU ruled that if consumers pay back their loan ahead of schedule, the bank must give them back all loan-related costs proportionately reduced. The Office of Competition and Consumer Protection and the Financial Ombudsman presented this position already in May 2016. However, many banks and other financial institutions retained all fees charged in the event of early repayment of consumer credit. After the September decision on the Aasa company, UOKiK issued three other decisions regarding the following entities: iCredit from Łódź, Optima from Gdańsk and Eurocent in bankruptcy from Kraków.

The CJEU provided clear interpretation on how the provisions on settlement in the event of early repayment of consumer credit should be understood. If banks and loan companies do not normalize the market situation themselves and do not reimburse consumers for unduly charged fees, we will make them do it with further decisions, announces Marek Niechciał, President of UOKiK.

Reimbursement of unduly charged fees

The latest decisions of UOKiK were addressed to three companies which, in the event of early loan repayment, retained in whole either a single fee, such as a preparation fee (Optima) or a commission (Eurocent), or several fees, including a fee for creditworthiness valuation, for delivering money to client’s home, and contractual penalties (iCredit). Eurocent declared bankruptcy on 20 March 2018. This company must inform its clients about the decision of UOKiK in a national daily newspaper. The others are obliged to immediately - regardless of whether they will appeal to court - discontinue using this illegal practice. In addition, as soon as the decision becomes final, they must inform of it all the consumers who paid their loans off ahead of schedule. Therefore, consumers will find out that they may file a complaint and claim a reimbursement of unduly charged fees (in part). If they do so, Optima and iCredit must give them the money back within 30 days.

Fines for other practices

Incorrect settlements regarding early repayment are not the only practices used by Optima and iCredit that have been questioned. For instance, the former artificially inflated the amount of non-interest loan costs, which may not exceed either the total loan amount or the sum calculated according to the formula from the Consumer Credit Act. The latter, on the other hand, added the commission it had deducted to the amount that consumers received as the loan amount. This resulted in borrowers’ excessive debt. This is the reason why the President of UOKiK imposed a fine amounting to more than PLN 483,000 (PLN 483,429 to be exact) on Optima.

The charges against iCredit concerned the artificial extension of the loan repayment period and imposing contractual penalties for failure to provide a surety. The company set the instalments in such a way that first they were equal, and when the loan was almost paid off, consumers were required to pay several dozen, and in some cases even more than 100, extra instalments amounting to several groszes. As a result, the repayment period significantly extended, which allowed the company to charge higher non-interest loan costs. According to the formula, their maximum amount depends on the loan repayment period.

Furthermore, UOKiK had reservations about contractual penalties that iCredit imposes if borrowers fail to provide a surety agreement within three days. In our opinion, this is not a contractual penalty, because it is not about compensation for damage suffered by the company. This is more of a fee for increased credit risk. Moreover, it is contrary to the purpose of surety, because instead of reducing the likelihood that consumers will not be able to pay the loan off, it actually increases it as consumers are charged with extra costs. If borrowers fail to provide surety, the company should demand another form of collateral, refuse the loan or offer a lower amount instead of imposing contractual penalties on them, says Marek Niechciał, President of UOKiK. Meanwhile, iCredit grants loans without waiting for surety. In addition, the company does not count the contractual penalty in non-interest loan costs, which makes it difficult for customers to assess the loan terms and compare them with other offers on the market. UOKiK imposed a fine amounting in total to more than PLN 902,000 on iCredit for violating consumer rights (PLN 902,362 to be exact).

Consumers should fight for their rights

If you paid the loan off ahead of schedule and the creditor has not settled with you the fees charged, file a complaint and cite the CJEU ruling, reference number: C-383/18 (Lexitor). Should the complaint be rejected, the Financial Ombudsman will assist you. Consumers may also take their case to court.

Consumer service:

Phone: 801 440 220 or 22 290 89 16 – consumer helpline
E-mail: porady@dlakonsumentow.pl
Financial Ombudsmen – in your town or district
Regional Consumer Centres: 22 299 60 90 - Dlakonsumenta.pl
Financial Ombudsman - following the complaint rejection by a financial institution

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL