With its most recent decision against Tax Care, UOKiK reminds employees of financial institutions that they must provide information in a clear, unambiguous manner that does not mislead clients. They should also inform clients of an investment’s risks to the same extent as its benefits. Poland’s competition court sent a similar message in its recent ruling against Getin Noble Bank.

Poland’s Office of Competition and Consumer Protection (UOKiK) instituted a proceeding against Tax Care after receiving numerous complaints from consumers who had invested in unit-linked life insurance policies of different insurers. The company had failed to inform them of the actual characteristics of the products and the risks, while highlighting only the benefits. In consequence, consumers chose a product that not only did not meet their expectations, but turned out to be completely different from the one being advertised. In its investigation, UOKiK confirmed the company misled consumers about the type of product, the length of the agreement, the amount and frequency of payments, future profits, risks and fees. The Authority has ordered the company to abandon the practices and also levied a fine of 770,990 PLN [172,480 EUR]. The decision may be appealed.

This is not the first time consumers have been misled on the financial services market. The Authority’s doubts were raised by Getin Noble Bank’s leaflets advertising unit-linked life insurance policies, the benefits of which were promoted while the prospect of losing money was written in industry jargon in small print. UOKiK imposed a fine exceeding 1 million PLN [224,000 EUR] for misleading consumers and required the bank to publish the decision on its website.

Poland’s competition court has now upheld that 2013 decision, rejecting the bank’s appeal. In justifying its ruling, the court also pointed to the failure of the company to present properly balanced information, including in leaflets and other publications. The court also reasoned that Polish consumers have had little experience with investment products because the commercial banks that offer them have begun operations in the country in just the past 25 years, following years of state-run banks dominating under the socialist system.

The fact that the information provided by advisors is important for consumers has been confirmed by a TNS Poland study commissioned by UOKiK. The research showed that the most widely recognised and comprehensible financial product is an ordinary bank account, but investment products that require considerable knowledge are far less understood. While 59 percent of respondents indicated they knew what these products were, only 39 percent understand how they work, explaining why so many depend on the opinions of financial advisors.

Additional information for the media:

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