• Ferratum Finanse loan company set loan conditions that were difficult to meet.
• As a result, contracts were terminated, and Ferratum Finanse imposed a fine on its clients in the amount of PLN 2 000, thus earning profits.
• This is one of the practices that UOKiK questions.

The President of the Office of Competition and Consumer Protection issued two decisions regarding Ferratum Finanse loan company: one of them concerned a violation of consumers’ collective interests, the other referred the use of abusive clauses.

The Ferratum Finanse company operated throughout Poland providing loans to people in a difficult financial situation. It advertised its offer on the Internet on advertising portals.

The Office found that the company terminated most of the contracts. It made profits on fines imposed on its clients who failed to establish security within three days. Ferratum Finanse required, for example, a guarantee of other people or a mortgage. The fine would amount to PLN 2 000 or to a half of the interest for the entire loan. UOKiK decided that it was not possible to provide the required guarantees in such a short time, and that fines were excessive. The deadline set by the company for establishing security was so tight that it was known in advance it cannot be met. Fines imposed on borrowers constituted the basic income of this company. It is unfair, unreliable and unethical, says Marek Niechciał, the President of UOKiK. The Office decided that misleading clients is a violation of consumers’ collective interests and considered high contractual fines to be abusive clauses.

Other practices that pose a threat to consumers’ collective interests include, for instance, a failure to comply with information obligations: Ferratum Finanse provided its clients with neither a form that would allow them to compare offers of various financial institutions nor a template of a statement of withdrawal from the contract. The company placed an untrue statement in the contracts, namely that it is not subject to the provisions of the Consumer Credit Act. It did not add the commission to the amount of the Annual Real Rate of Interest, which affected (lowered) the loan costs. Ferratum Finanse would also issue bills of exchange without the mandatory ‘not to order’ clause. Such a clause protects consumers from endorsing, i.e. from assigning rights arising under a bill of exchange to another person. Ferratum Finanse was focused only on profit from the very beginning, from too tight deadlines to establish security to issuing a bill of exchange because clients did not pay a high fine, adds Niechciał.

The fine for violation of consumers’ collective interests and the use of prohibited clauses amounts to over PLN 81 000 (PLN 81 160). All practices and clauses that the Office considered to be unlawful are mentioned in its decisions (abusive clauses, violation of consumers’ collective interests). Ferratum Finanse is obliged to inform its clients about UOKiK’s decisions by registered mail. The company ceased to use disputable practices, but it is because it changed its business activity profile. The decisions are not final.

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