• “Safe investment”, “stable financial condition of the company”, “exclusive offer” – representatives of GetBack misled consumers.
• The President of the Office of Competition and Consumer Protection, Tomasz Chróstny, has found that the company used unfair market practices when offering and selling corporate bonds.
• The decision of the President of the Office will help consumers seek claims in courts.

GetBack (currently under restructuring) is a company that for over 2 years has issued corporate bonds en mass in order to funds its operations. It offered those bonds via banks, brokerage houses and its own sales network. The majority of bonds was issued by way of a private offering, therefore it was issued to a maximum of 149 investors. This allowed the company to avoid preparing a prospectus and information memorandum, which must be approved by the Polish Financial Supervision Authority and made public.

“There were many irregularities surrounding the offering of bonds by GetBack. Company representatives have misled consumers by claiming that corporate bonds are a safe investment, the company is in good financial condition and the offer is exclusive or limited in time. In effect, clients made decisions concerning big sums of money which they most likely would not have made if they received accurate information. Now they have to recover the invested funds, which in many cases represented their entire life savings,” said Tomasz Chróstny, President of the Office for Competition and Consumer Protection.

All 3 allegations made against GetBack have been confirmed during the proceedings. Each of them concerned the fact that the company misled consumers.

1. Company representatives suggested to consumers that investments in GetBack bonds are safe and the loss of invested funds is unlikely.

One of the consumers described it as follows in their complaint: When I asked about risk, they answered that there is no risk, that the capital investment is 100% safe. You can disinvest every half a year, at your request. The investment is secured under Article 777 and additionally by the Guarantee Fund. Each invested PLN is secured by the Guarantee Fund. Even the worst scenario will not result in the loss of capital. It is like a deposit at the Bank.

Meanwhile, corporate bonds are not as safe a form of investment as treasury bonds. They are not guaranteed by the state and their security depends on the financial condition of the company that issues them. The issuer is liable for obligations arising from those bonds with its own assets. Corporate bonds are not covered by the guarantees of the Banking Guarantee Fund. Prior to investing money, the investor should have information that they may lose that money should the issuer of corporate bonds become insolvent.

2. During the offering of bonds, consumers were ensured that the company’s financial condition is stable.

Meanwhile – as indicated in the e-mail correspondence made public – the management board of GetBack knew as early as in the summer of the year 2017 that the company is in a difficult financial situation and will have to fight for survival. At the end of 2017, the consolidated loss recorded by the company amounted to PLN 1.35 billion. In 2018, consumers to whom GetBack wanted to sell bonds were still being told by the entity’s representatives that the company is profitable and will not become insolvent.

3. Offer is made only to the select few and limited in time.

Using the aforementioned arguments, GetBack representatives wanted to encourage consumers to make an immediate decision, without giving them a chance to analyze documents or think about their choices. One of the bondholders wrote as follows: I also received information that the product is exclusive and, in the case of certain series, I was pressured that the decision has to be made “yesterday”, otherwise I will miss out on this incredible offer. Company employees omitted information that the bonds are issued even several times a week, the only thing that changes is the series number, and that several thousand people have already invested in them.

GetBack use the contested practices until 31 March 2018. The President of the Office of Competition and Consumer Protection ordered the company to publish a statement on its website containing information about irregularities and a link to the decision.

“The decision confirms that the consumers have been misled by GetBack when being offered corporate bonds. Therefore, when the decision becomes final, it will constitute a precedent for courts and may make it significantly easier for consumers to seek individual civil law claims, other than the ones provided for in the company’s arrangement with creditors. In such case, the courts will be bound by the facts confirmed in the decision issued by the President of the Office of Competition and Consumer Protection. At the same time, the imposition of other financial sanctions on the company would violate the provisions of the company’s final arrangement with creditors, approved by the court. According to the provisions of the arrangements, the Company is currently unable to satisfy all of the obligations arising form issued corporate bonds. Additional financial burdens could consequently limit creditors’ ability to recover funds stipulated in the arrangement even further. Bondholders asked the President of the Office of Competition and Consumer Protection not to impose a financial penalty on the entity, and this course of action is valid from the perspective of acting in the interest of aggrieved consumers,” said Tomasz Chróstny, President of the Office of Competition and Consumer Protection.

The decision is not yet final and the company may lodge an appeal with the court.

Consumer support:

Phone: +48 801 440 220 or +48 22 290 89 16 – consumer helpline
E-mail: porady@dlakonsumentow.pl
Consumer ombudsmen – in your town or district
Regional Consumer Centres: 22 299 60 90 – Dlakonsumenta.pl

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