• According to the President of UOKiK, Idea Bank misled consumers when selling GetBack corporate bonds.
• The decision issued by UOKiK will provide victims with solid support when pursuing claims.
• This is not the end of actions taken by the office in the Idea Bank case.

In October last year, the Office of Competition and Consumer Protection initiated proceedings in which it levelled charges against the bank for using practices that adversely affect consumers’ collective interests. The proceedings were dealt with in order of priority. More than 520 complaints have been filed with the office since that time. Both the complains and the charges levelled by the office showed that the Idea Bank’s representatives provided customers with misleading information. For instance, they claimed that GetBack bonds would generate a guaranteed profit or that access to these bonds was limited.

Today, UOKiK confirmed some of the charges levelled a few months ago and issued a decision regarding Idea Bank, stating the use of unfair market practices.

Testimony given by witnesses during five administrative hearing processes shows how the bank’s employees cheated their clients. In the decision we cited many clients to demonstrate how the mechanism worked. Corporate bonds were told to be safe products generating guaranteed profit. The bank’s employees offered bonds to their present and new clients, stressing the uniqueness and profitability of the offer or the lack of risk. To speed up the purchase, they even filled out the forms for them. The office could not have made a different decision. We have discovered practices that should have never taken place in an institution of public trust that the bank poses to be, says Marek Niechciał, the President of UOKiK.

The Office has no doubt that consumers were being misled when GetBack corporate bonds were sold to them by Idea Bank. There is abundant evidence to demonstrate it. During an investigation carried out at the bank’s headquarters, the UOKiK’s employees questioned several members of the management board, managers and sales directors. Their statements as well as information obtained from other employees and the material found were confronted with testimony and notifications given by the injured. Therefore, the office reconstructed the sales process. Consumers received information about GetBack corporate bonds offered for sale from the bank’s employees through text massages, emails, by phone and directly in Idea Bank or Lion’s Bank branches. Consumers were persuaded to buy bonds and they were also given every assurance that the investment is profitable and safe. This is perfectly illustrated by an e-mail from the bank’s representative to a customer:

Finally, I have an offer without age restrictions, without insurance and without shares. Guaranteed corporate bonds for 24 months which pay 6% interest on an annual basis. Interest is paid every month.

The bank’s representatives compared corporate bonds to bank deposits or treasury bonds, indicating non-existent similarities. Very often they presented them as an alternative to non-risky investments known to consumers. This is proved true by witness statements and complaints, for instance:

She persuaded me to buy bonds claiming that they were an alternative to a deposit and calling them treasury bonds. (...) I was misled about the product type as I was convinced I was buying treasury bonds.

I used to buy treasury bonds in the past, hence I thought there was no cause for concern. When the bank’s employee talked to me, the term “corporate bonds” has never been used. I presume that the offer was based on positive associations of older people, such as myself, with treasury bonds.

The purpose of such tricks was to make consumers believe that the features of the products are the same. Meanwhile, these are completely different financial instruments, their investment risk and access to capital and interest are incomparable.

Customers who wanted to read the documents and make an informed decision, were convinced that the offer is limited and that decisions should be made immediately. In many cases, they were told that the product was exclusive and that they were numbered among a select group of 149 customers who were offered the product. The purpose of the message was to highlight the uniqueness of the consumer, chosen from among all the bank’s clients, and the attractiveness of the offer. At the same time, consumers were not informed how often these bonds were issued (probably as often as five times a week), and that the allegedly elite circle of bond holders had several thousand people.

The President of UOKiK decided that the bank misled consumers by informing them that (i) GetBack bonds would give them a guaranteed annual profit,  (ii) they are as safe as bank deposits or treasury bonds and (iii) they are subject to the supervision of the Polish Financial Supervision Authority.

The bank has to inform about the decision of the President of UOKiK on its website by making a specifically worded statement.

The decision is not legally binding. This means that administrative proceedings against Idea Bank have not yet been definitively completed and Idea Bank may appeal to the court within one month of the decision delivery. The President of UOKiK will decide in the final decision on the remaining charges related to misselling, i.e. a sales practice in which the product (GetBack bonds) is unsuitable for the customer’s needs. Currently, the extensive body of evidence collected in the case is subject to an in-depth analysis. If these allegations are confirmed, the company might be fined up to 10% its turnover and obliged to mitigate adverse effects of the above-mentioned practice.

What does this decision mean for the injured?

Final decision of the President of UOKiK confirming that the entrepreneur has violated the law sets a precedent. This means that the office’s findings regarding this case are binding on common courts when they resolve individual disputes involving consumers over practices in question. Consumers may also refer to the decision of UOKiK when they file a complaint.

Any bond holders feeling misled by Idea Bank may pursue claims based on Article 12 of the Act on Counteracting Unfair Market Practices. They may demand that the effects of the practice be reduced or that any damage be repaired under relevant laws and regulations. Information in this regard may be provided by municipal or district consumer ombudsmen and the Financial Ombudsman. In addition, any consumer involved in a court dispute may submit a request to the President of UOKiK or the Financial Ombudsman for their reasoned opinion on his/her case.

Additional information for the media:
UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL