• The President of UOKiK has initiated proceedings against three banks: BPH, PKO BP and Pekao.
• The issue which was found to be problematic is the application of ambiguous rules for the determination of currency exchange rates.
• The actions of the Competition Authority pertain to the possible use of abusive clauses in standard agreements and in annexes to mortgage loan contracts denominated in foreign currencies.

The Act on competition and consumer protection confers upon the President of UOKiK the right to initiate proceedings intended to examine whether standard form contracts used by entrepreneurs contain any abusive clauses. Until April 16, 2016, the task of examining the alleged abusive clauses fell upon the Court of Competition and Consumer Protection.

The Office of Competition and Consumer Protection initiated proceedings against three banks: BPH, PKO BP and Pekao. These are by no means the first proceedings pertaining to currency spreads. The questionable provisions pertain to the manner in which the currency exchange rates are to be determined. These provisions are imprecise and discretionary in nature; for example, the currency exchange rate was to be determined “by adding/subtracting a margin of no more than 5%” (PKO BP) or was defined as the “average exchange rate of the National Bank of Poland (NBP) minus the purchase margin specified by decision of the bank” (BPH). At the same time, the margin charged by the banks is determined in an arbitrary, discretionary manner, based on criteria which cannot be verified. As a result, the borrower is unable to verify whether the margin calculations are in fact correct. Bank Pekao determines the currency exchange rates on the basis of „market buy and sell rates”, without actually stating how the consumer may verify the said rates. Furthermore, the undertakings tend to refer their customers either to the Reuters service – which is locked behind a paywall – or to various currency exchange tables prepared by the banks themselves, without specifying when and how many times per day such tables shall be prepared and published. As a result, the borrowers are unable to estimate the exchange rates used for the purposes of calculation of their loan payments on their own.

Furthermore, PKO BP reserves the right to unilaterally change the currency spread amounts. The bank makes its own spread amount dependent, among other things, upon the change in the currency spreads applied “by at least 2 out of 10 of the largest banks (in terms of total assets) by at least 0.5%”. BPH adds its own margin to the exchange rates published by the National Bank of Poland; however, determining the amount of this margin may present difficulties for the consumer, since the margin is determined “once per month, by decision of the bank”. Furthermore, the bank also reserves the right to change the amount of the margin charged. These terms and conditions may be difficult to verify for the average consumer, with the currency exchange rates being made dependent upon the arbitrary decisions of individual undertakings.

Actions of the UOKiK

The proceedings conducted against banks may lead to a decision in which the President of the UOKiK may hold that any further use of the given standard form contract shall be prohibited. The maximum penalty may be equal to the amount of up to 10% of the bank’s turnover. The President of the Competition Authority may also specify the measures to be taken in order to remedy the existing effects of the infringement.

The President of the UOKiK is verifying the rules applicable to the determination of currency spread amounts in 10 different banks. The Competition Authority has decided to take action following various complaints received from consumers. So far, the Competition Authority has filed charges against the following banks: BGŻ BNP Paribas, BZ WBK, Bank Millennium, Deutsche Bank, Getin Noble Bank, Raiffeisen Bank Polska, PKO BP, Pekao and BPH.

The practices applied by mBank have also been analysed by the President of UOKiK. In that case, the Competition Authority has also conducted preliminary proceedings. However, since the Court of Appeal is already examining the provisions which the President of the Competition Authority considered to be questionable, conducting further proceedings in that case is no longer necessary. At the present stage, appeal proceedings against the judgement of the Court of Competition and Consumer Protection are underway before the Court of Appeal (case no. VI ACa 1752/16). Consumers contend that the imprecise provisions as to the determination of currency exchange rates should be considered prohibited clauses. The judgement of the Court in that case, however, is still pending. The President of the UOKiK has issued a reasoned opinion in the case in question, concurring with the claimants that mBank has indeed included prohibited clauses in its contracts as they preclude consumers from making an estimate of the actual currency exchange rates.

Consumers are reminded that in case of any problems which they may encounter with respect to financial services, they can rely on the support of the Financial Ombudsman.

Additional information for the media:

UOKiK Press Office
pl. Powstańców Warszawy 1, 00-950 Warsaw

Phone: 695 902 088
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL