Consumer protection Authority weighs in on low deposit mortgage insurance charge collected by mBank. If the court rules the clause is prohibited, the bank will return the charge to consumers who have filed the lawsuit

Poland’s Office of Competition and Consumer Protection (UOKiK) has now issued a sixth standpoint material to a case. The Authority was called upon to provide its opinion in a dispute between mBank and consumers paying mortgages pegged to the exchange rate of the Swiss franc. Clients are demanding the return of low deposit mortgage insurance. They cite the fact that the clause applied by mBank has been entered into the register of prohibited clauses (number 6068). The case is pending in District Court in Warsaw.

With the Authority having examined the documents submitted by the plaintiffs, UOKiK President Marek Niechciał explained: “Our doubts were raised above all by the lack of important customer information — about their rights, responsibilities and who the real beneficiary of the insurance coverage is. That is what led us to conclude that the provision applied by mBank is prohibited.

According to the Office, the provisions being challenged are contrary to good practices, because:

• They place the burden of payment on the consumer, but fail to make it clear who the beneficiary of the insurance is.
• Clients were not informed of the recourse risk, which is crucial information, as it is attended by the stipulation that if the insurer has paid damages, it has the right to recoup them from consumers.
• According to the clauses used by mBank, clients must pay the premiums even if they have paid off the required part of the credit. In such a situation, the bank can demand the insurance premium be returned, because the insurance protection has become unnecessary. The credit holders, meanwhile, do not have that right.

If the court agrees with the position of the Authority and recognises the provisions as prohibited, they will not be binding on consumers throughout the contract period. This means that mBank will have to return the premium for low deposit insurance to the plaintiffs.

The legal assessment presented by UOKiK in a standpoint cannot be used as a benchmark for other cases, which may seem similar. In all of the cases it sees, UOKiK assesses the facts and the law, the case law involved, and the request made by the plaintiffs.

The standpoint material to a case is:

• the written position of UOKiK. It presents the Office’s arguments and point of view relevant to a given conflict, based on the particular factual and legal state of affairs. The assessment presented in the standpoint therefore cannot be used as a benchmark for other cases
• issued only in cases ongoing before the court
• provided if it is in the public interest
• provided in disputes between consumers and enterprise
• presented on UOKiK’s own initiative, at the request of consumers, an enterprise or the behest of the court.

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL