The President of the Office of Competition and Consumer Protection has issued another relevant opinion. The Competition Authority challenged the provisions of the contracts for mortgage loans indexed to the Swiss franc which were granted by Millennium Bank.

The President of the Office of Competition and Consumer Protection has presented a relevant opinion pertaining to the proceedings against Millennium Bank which are pending before the District Court in Grudziądz. The borrower demands the reimbursement of low down payment insurance premiums (low down payment insurance being a form of additional protection used by banks where the borrower fails to make a down payment on real estate at a percentage stipulated under the contract) as well as a declaration that the clauses which imposed the obligation to make such payments upon the borrower were abusive.

The President of the Competition Authority has supported the view of the bank’s client. – The establishment of low down payment insurance is, in itself, by no means unlawful. However, in this specific situation, one is forced to conclude that both the manner and the mechanism by which the obligation in question was imposed upon the consumer are inconsistent with acceptable practices – says Marek Niechciał, President of the Office of Competition and Consumer Protection.

The Competition Authority asserted that the impugned provisions pertaining to low down payment insurance are abusive for the following reasons:

• The consumer is unable to determine the scope of his or her rights and obligations on the basis of the wording of the provisions alone,
• the provisions in question fail to specify the terms and conditions of insurance, the scope thereof or the impact of conclusion of the insurance contract by the bank on the position of the borrower,
• the borrower has no influence on the possible changes of the contract concluded between the bank and the insurer (this is of great importance since, in the present case, the entity providing insurance coverage has subsequently been substituted by another entity despite the fact that the terms and conditions of the contract did not provide for a possibility of such change, while under the loan agreement a specific insurer had been designated),
•  the consumer has not received any information on the manner in which subsequent low down payment insurance premiums would be calculated,
• under the provisions in question, the borrower is forced to bear the costs of insurance despite the fact that the bank remains the sole beneficiary thereof,
• the provisions in question fail to provide the borrower with information on the possible risk that the insurer may claim the repayment of the damages paid to the bank,
• the provisions in question make it impossible for the consumer to verify whether the costs of insurance were in fact charged in the correct manner,
• the client of the bank was forced to bear the costs of insurance without knowing what he was actually paying for,
• the provisions in question result in the risk arising out of banking activities being transferred upon the borrower.

The relevant opinion of the President of the Competition Authority pertains to the case no. I C 1615/16 – dispute between the consumer and Millennium Bank. The President of the Office of Competition and Consumer Protection may issue a relevant opinion in all cases pertaining to consumer rights protection, not just in cases which concern financial services.

The legal assessment presented by the Competition Authority may not be applied to any other cases, even where such cases are ostensibly similar. In each given case, the President of the Office of Competition and Consumer Protection performs an assessment of the factual and legal circumstances of the case, the applicable case law as well as the application filed by the claimants. The relevant opinions issued so far are available online at the website of the Competition Authority:

https://uokik.gov.pl/istotny_poglad_w_sprawie.php.

Relevant opinions in consumer cases – the rules

• A relevant opinion in a given case is a written opinion of the President of the Office of Competition and Consumer Protection in which the Competition Authority presents its arguments and views which are relevant to the given dispute, based on the specific factual and legal circumstances of the case before it. For the above reason, the assessment contained in a relevant opinion may not be applied to any other cases.
• The relevant opinion is only issued with respect to a case pending before a court of law.
• It may only be issued where doing so is considered to be in the public interest.
• A relevant opinion always pertains to a dispute between a consumer and an undertaking.
• The President of the Office of Competition and Consumer Protection may present a relevant opinion at his own initiative, at the request of the consumer or undertaking, or at the request of the court.

Additional information for the media:

Press Office of the Competition Authority
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: 695 902 088
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL