Failing to include costs of service at customer’s home and additional upfront fee in both total costs of a loan and annual percentage rate, as well as misleading advertising – to name a few practices of Provident Polska challenged by UOKiK. The imposed fines amounted to nearly PLN 13 million

The President of UOKiK has issued two decisions concerning Provident Polska. The first concerned the default on the obligation to provide information and imposed a fine exceeding PLN 12 million. The other one related to doubts raised by advertisements, which resulted in imposing a fine of over PLN 480 thousand.

Default on the obligation to provide information - the first decision

According to the law, before an agreement on consumer credit is concluded, a customer has to be informed in writing, on a special form, on all costs related to granting the loan. Doubts were raised by information forms used by the undertaking in which the section “Costs that the Customer shall bear in connection with the Loan Agreement” did not contain information required by law. The proceedings against Provident Polska were initiated in June, 2013.

Among other things, the company offers loans with service provided at customer’s home. Money is delivered to customer’s home and repayment instalments are collected in the same way. Provident charges two fees for the service: the so-called additional upfront fee for activation of the “service at customer’s home” option and delivery of money to customer’s home as well as a fee for servicing the loan at customer’s home (remuneration for collecting repayment instalments).

The Office has discovered that the undertaking does not provide in the point of the form where loan costs are presented any information on the fee for servicing the loan at customer’s home and the so-called additional upfront fee. Additionally, the above fees are not taken into account in the total cost of loan and annual percentage rate. Consequently, the customer is not aware of credit costs. Furthermore, the customer is not able to make a reliable comparison with other offers.

According to this decision, the penalty for violation of collective interests of consumers imposed on Provident Polska amounts to PLN 12 355 597. The decision is not final and the company may appeal against it to the court.

Misleading advertising - the second decision

The President of UOKiK was also concerned about advertisements of Provident Polska published in February, 2013, in TV inserts to dailies of one of media groups. The entrepreneur highlighted its offer by advertising the credit as such that may be withdrawn from within 14 days, even though this right applies in fact to all consumer loans. The statutory right was presented as a distinguishing feature of the company’s offer which misled consumers. Additionally, the advertisement implied that according to the Office’s report, agreements proposed by Provident Polska are leading products on the consumer credit market. In the Office’s opinion, such an illegitimate use of its authority might have affected consumers' decisions concerning the selection of services offered by the entrepreneur. The UOKiK’s report only provides results of inspection carried out on standard forms of agreements present on the market and should not be used to rank them or make recommendations for consumers. For violation of collective interests of consumers, the fine imposed on Provident Polska amounted to PLN 484 509. The company appealed against the decision to the court.

At the same time, UOKiK would like to remind consumers that in the case of a dispute with a financial institution, they may seek assistance of municipal or poviat consumer ombudsmen or non-governmental organizations – Consumer Federation, Association of Polish Consumers. Advice may also be obtained, free of charge, by calling the following telephone number: 800 007 707.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 827 28 92, 55 60 314
Fax +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]