• Idea Bank practised misselling, i.e. it offered GetBack bonds to consumers in a way not adapted to their needs - concluded the President of UOKiK, Tomasz Chróstny.
• The President of UOKiK ordered to pay compensation to the wronged parties.

In August last year, the Office for Competition and Consumer Protection issued a partial decision which stated that Idea Bank was using practices infringing collective consumer interests - misleading them when offering GetBack bonds.

Yesterday, UOKiK has confirmed further charges - it issued another decision concerning Idea Bank, stating the use of the so-called misselling.

- Idea Bank offered its clients high-risk products that did not match their needs in any way. The illicit practice of misselling was confirmed by collected evidence, including hundreds of consumer complaints. Corporate bonds were offered even to those clients who had never dealt with investment products and were not interested in them, and kept their savings on bank deposits. The practice is all the more reprehensible because the wronged parties also include the elderly - explains Tomasz Chróstny, President of UOKiK.

The Authority has no doubt that GetBack corporate bonds should not be offered to consumers by Idea Bank. This is demonstrated by evidence collected in the proceedings, including materials obtained during the inspection.

- On the part of Idea Bank - which, as a bank, should be perceived as an institution of public trust - there was no reliable adjustment of the offered product to the client's needs, including the individual risk profile - emphasizes Tomasz Chróstny, President of UOKiK. Banks as professional entities bear special responsibility for consumers, whose financial assets are the foundation of their existence - this activity requires maintaining absolutely the highest ethical standards - he adds.

For example, a consumer complained that:

- The adviser offered me to transfer funds from the deposit, without losing interest, to another beneficial form of investing capital, with a higher interest rate. I stress that I was not interested in risky moves and the funds saved were supposed to supplement my budget during my retirement. At the time of purchase, I was 61 and I had no intention of risking. In my conversation with the adviser, I emphasized that I was not a businessman but a full-time employee at the end of my career and I would not be able to re-earn this amount if there was any danger of losing funds. However, the adviser assured me that there was no such danger.

UOKiK determined that the bank should know and take into account the investment preferences of clients to whom it offered bonds, e.g. based on the history of products previously activated in the bank or based on information provided by consumers to sellers. Unfortunately, instead of presenting an offer that met these clients’ needs, the bank took advantage of their ignorance to sell a risky investment product, which is corporate bonds.

Compensation for the wronged parties

The decision issued today imposes an obligation on Idea Bank to pay compensation to the consumers who purchased Getback bonds via the bank. The decision sets out detailed rules for calculating the amount of refunds. The model adopted by UOKiK assumes that every bondholder who submits an appropriate request will receive a compensation equal to 20% invested funds, calculated for an amount of up to PLN 50,000. This is the amount the consumers - as a rule - had to invest in GetBack bonds under one issue to participate in it. In such a situation, the compensation due to the consumer against the misselling used by the bank will amount to PLN 10,000.

This decision imposes on the bank an obligation to pay compensation which will aim at least to partially compensate the damage suffered by the bondholders.

First of all, the UOKiK’s decision is another step to help consumers pursue civil claims and demand repayment of all funds invested. The findings and materials collected in both decisions will be useful for the courts in issuing judgments in such cases.

The bank must inform about the UOKiK’s decision on its website by publishing a statement with the content specified in the decision. In addition, each wronged party must receive the information by post. The President of UOKiK demanded the bank to pay compensation within 1 month of receiving the relevant request from the consumer. Detailed terms are specified in the decision. The decision is not final and Idea Bank may appeal to the court within one month of its delivery.

The issuance of the second, partial decision means that the administrative proceedings against Idea Bank regarding the offering of GetBack bonds have been completed.

Important information for the wronged parties:

Final decision by the President of UOKiK concluding that the undertaking violated the law serves as a preliminary ruling. This means that the Authority’s findings as to the use of the practice are binding on common courts when they consider individual cases involving consumers and practices questioned in the decision. Consumers may also refer to the UOKiK’s decision when they file a complaint.

Any bond holder who feels misled by Idea Bank when being offered GetBack bonds (practice found in partial decision No. RBG-13/2019), may pursue claims based on, for example, Article 12 of the Act on counteracting unfair market practices. They may demand that the effects of the practice be rectified or the damage suffered be repaired under general rules. In this case - in accordance with Article 13 of the Act on counteracting unfair market practices - it is the undertaking's responsibility to prove that their actions did not mislead the client. Detailed information in this regard may be provided by municipal or district consumer ombudsmen and the Financial Ombudsman. In addition, every consumer involved in a court dispute may apply for a reasoned opinion regarding their individual case to be issued by the President of UOKiK or the Financial Ombudsman.

Consumer service:

Phone: 801 440 220 or 22 290 89 16 – consumer helpline
E-mail: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Consumer Ombudsmen – in your town or district
Regional Consumer Centres: 22 299 60 90 – Dlakonsumenta.pl

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