• President of UOKiK Tomasz Chróstny found prohibited the so-called spread clauses applied by BPH bank in annexes to mortgage loan contracts.
• The provisions do not specify clearly the rules for determining foreign exchange rates on the basis of which the credit instalment is calculated.
• The penalty imposed on BPH is over PLN 470 thousand.

The basis for intervention against BPH were consumer complaints about arbitrary determination of the rates for buying and selling foreign currencies. Following the proceedings, President of UOKiK Tomasz Chróstny issued a decision against BPH bank concerning declaring clauses included in annexes to mortgage loan contracts as prohibited. The contested provisions set out the rules for determining exchange rates in a manner that is virtually impossible for consumers to verify. In practice, the bank can quote virtually any instalment amount and the consumer cannot verify whether it has been calculated correctly.

“This is already the eighth decision concerning the unclear rules for the determination of currency exchange rates. Banks are a stronger player in contact with the consumer, but they should act professionally and transparently in the execution of credit loans. This involves, inter alia, providing the customer with the opportunity to determine the economic consequences of provisions contained in the contract or in its annex. Therefore, the clauses defining the rules for determining exchange rates must be unambiguous,” says Tomasz Chróstny, the President of UOKiK.

The prohibited provisions include those stipulating that the exchange rates applied by BPH are based on the "most recent average market exchange rate", which is the sum of purchase and sale rates available on the Reuters website divided by two. However, both the regulations and other objective and available sources do not specify what the "average market exchange rate" is, nor is it known for which specific moment the bank determines the rates. What is more, the website address included in the clause (www.reuters.pl) redirects to the English version of the Reuters website.

Also prohibited are provisions pursuant to which exchange rates may change an unlimited number of times. Thus, the customer does not know how many specific exchange rates will apply on a given day and at exactly what time they will be published. Thus, the bank may be likely to impose on consumers the currency exchange rates that are most favourable to the bank.

The bank's exchange rates are adjusted for the margin, but the clauses describing how the margin is determined are unclear and impossible for consumers to verify.

President of UOKiK Tomasz Chróstny prohibited the application of the contested clauses and imposed a penalty on BPH of over PLN 470,000 (PLN 478,242). The decision is not final and the bank may decide to appeal to a court of law. Once the decision become final, the bank must also communicate it to consumers and inform them that the contested provisions - as prohibited - are not binding. This would make it easier for consumers to pursue their claims.

A description of all contested clauses can be found in the UOKiK's decision – download the decision.

The decision concerning BPH bank is one of the most recent ones concerning currency conversion clauses. The President of UOKiK issued 8 decisions confirming abusiveness of currency conversion clauses in annexes to loan contracts. He also imposed penalties totalling more than PLN 143 million on the banks. The amount of the sanction depends on the bank's turnover and the period of the extent and consequences of the infringement, as well as on the existence of mitigating and aggravating circumstances specified in the Act on Competition and Consumer Protection. One proceeding has remained pending against Raiffeisen Bank International AG.

Additional information for the media:

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