• Proceedings against Idea Bank and Polski Dom Maklerski, four preliminary proceedings.
• Legal changes proposed.
• UOKiK’s activities in connection with the sale of GetBack corporate bonds.

In April 2018, when the first information about GetBack started to appear in mass media, the Office of Competition and Consumer Protection began to check how the company’s corporate bonds were sold. Since mid-May, UOKiK started to receive numerous complaints from consumers. They suggest that the sellers could mislead customers by, among other things, claiming that GetBack bonds were as safe as a bank term deposit. The Authority also received signals that misselling, i.e. persuading customers to purchase a product which did not suit their needs, may have taken place. UOKiK has already pressed charges in two cases, and four preliminary proceedings are underway. Over 9,000 persons could have suffered losses investing in GetBack bonds.

“This case is a top priority for us. We are checking if there were any irregularities when GetBack bonds were offered. We have initiated proceedings against Idea Bank, which, according to numerous complaints, could have misled consumers. In addition, we are conducting proceedings against Polski Dom Maklerski on recognition of the clauses of template contracts as unlawful. Furthermore, we have proposed a package of changes which should improve consumers’ safety. In the GetBack case, we cooperate with the Financial Ombudsman, Central Anti-Corruption Bureau, Prosecutor’s Office and Polish Financial Supervision Authority,” says Marek Niechciał, the president of UOKiK.

Idea Bank

More than 250 complaints have been filed against Idea Bank. They suggest that when GetBack bonds were offered, the company employees could have misled consumers and committed unfair sale. In October 2018, UOKiK instituted proceedings regarding suspected use by Idea Bank of practices infringing collective consumer interests. The allegations concern the fact that Idea Bank representatives provided customers with false information, e.g. that GetBack bonds would give them guaranteed profit or that access to those bonds was limited. Furthermore, they recommended purchase of the bonds to persons about whom they should know that they did not accept risky investments.

Allegations against Idea Bank:

• Misleading consumers about the fact that Getback bonds gave guaranteed annual profit or that they were as safe as a bank term deposit or government bonds.

An example of a complaint: The adviser assured me that investment of my money in GetBack bonds is safe and guarantees 6% profit, which, in my opinion, did not indicate the speculative nature of their yield.

• Providing customers with misleading information that the access to GetBack bonds was limited and the offer was unique, and that they would be sold only for a short time, in order to exert pressure to purchase them immediately.
• Offering GetBack bonds to persons for whom they were inappropriate in terms of the acceptable investment risk. It concerned both holders of bank term deposits, structured deposits, unit-linked life insurance and new clients of Idea Bank.

An example of a complaint: The adviser proposed that I move the funds from the term deposit, without losing the interest, to another profitable form of investment with higher interest (...) I would like to point out that I was not interested in risky movements, and that the funds saved were supposed to support my budged after retirement. At the moment of purchase I was 61, and had no intention to take risk whatsoever. I emphasised during the conversation with the adviser that I was not a businesswoman but a full-time employee about to end my professional career, and that I would not be able to make up for that amount, if there was any risk of loosing the funds. The advisor assured me, however, that such a risk did not exist.

If the allegations prove to be true, the company may face a financial penalty of up to 10% of its turnover for each breach, and the need to eliminate the consequences of the unfavourable practices.

Polski Dom Maklerski

UOKiK is also conducting the proceedings against Polski Dom Maklerski (PDM). It instituted them in August 2018. The Authority’s doubts were raised by a provision included in the “Form for Acceptance of the Offer to Purchase GetBack (...) Series Bonds”, which PDM sent to its clients by e-mail so that they could fill it in. According to it, the buyer confirmed that they did not hear or receive any information which would be contrary to what was written in the Bond Purchase Offer or Terms and Conditions of Bond Issue. The client was not able to send that form without accepting that section, even if it was not the case.

UOKiK believes that it may be a prohibited clause which may prevent the consumer from pursuing claims. If the allegation proves to be true, the company may face a financial penalty of up to 10% of its turnover and the need to eliminate the consequences of the breach.

Preliminary proceedings

Apart from that, UOKiK is conducting four preliminary proceedings with respect to offering GetBack bonds. They concern the company itself and four intermediaries.

• GetBack (currently, under restructuring) On 25 April 2018, UOKiK instituted the preliminary proceedings regarding the sale of its corporate bonds. Its aim is to determine whether GetBack and the entities cooperating with it provided consumers with reliable, true and complete information on the bonds, as well as whether misselling took place when they were sold. Once the proceedings were instituted, UOKiK employees conducted an inspection at the GetBack headquarters and two other locations. Thanks to them, they obtained documentation which helps determine which intermediaries were mostly involved in selling the bonds to consumers.
• Idea Bank and Polski Dom Maklerski. The preliminary proceedings against those entities are still underway.
• Mercurius Financial Advisors. The company sold GetBack bonds. UOKiK is checking whether it provided consumers with reliable information, and whether misselling took place.
• Noble Securities. The company sold GetBack bonds. UOKiK is checking whether it provided consumers with reliable information, and whether misselling took place.

Other activities

The Ministry of Finance is also working on an amendment of the regulations thanks to which it would be possible to identify threats on the financial market earlier, and which would minimise the risk of clients being mislead or of misselling. Recently, UOKiK has presented a package of its proposals to the Ministry of Finance. They include, among other things, a register of persons selling financial products, limits of commission for them, penalties for managers, and recording of the selling process.

On 30 October, at the UOKiK headquarters, a meeting between the Financial Ombudsman and UOKiK President with brokerage houses and banks which offered and sold GetBack corporate bonds took place. The aim of the meeting was to discuss communication with the bond holders and consumer complaint management.

Consumer support:

Phone: +48 801 440 220 or +48 22 290 89 16 – consumer helpline
E-mail: porady@dlakonsumentow.pl
Branches of the Consumer Federation
Consumer ombudsmen – in your town or district
Financial Ombudsman - when a complaint has been rejected by a financial institution

Additional information for the media:

UOKiK Press Office 
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone: +48 695 902 088, +48 22 55 60 314
Email: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL