President of UOKiK Tomasz Chróstny issued 4 decisions against Idea Bank, imposed fines totalling over PLN 17.2 million on the bank and ordered to pay PLN 38 thousand in compensation to each consumer who purchased investment certificates issued by Lartiq (formerly Trigon).

President of the Office of Competition and Consumer Protection Tomasz Chróstny issued 4 decisions against Idea Bank. Three of them concern the violation of consumer rights in offering complex financial products: investment certificates, structured deposits and unit-linked life insurance plans (ufk). In his fourth decision, the President of UOKiK stated that the company had applied the clauses that are abusive and prohibited in bank agreements with respect to modification clauses.

“This is not the first time that we have very serious reservations towards the Idea Bank. We have already concluded that the company was infringing consumers' rights when selling GetBack corporate bonds - it misled them and offered them products not suited to their needs, i.e. it used misselling. This time the charges concerned other financial products. The Bank provided customers with untrue information about, inter alia, risks and profits, and used misselling techniques. It is absolutely unacceptable to offer high-risk products to people who prefer safe investments, as well as to mislead them and conceal important information,” says Tomasz Chróstny, the President of UOKiK.

Investment certificates under Lartiq funds (formerly Trigon)

The first decision concerns investment certificates offered by Idea Bank and issued by Lartiq (formerly Trigon) Profit XXII, XXIII, XXIV Non-Standard Closed-End Securitization Fund (NS FIZ). It is a high-risk product, however Idea Bank offered it to individuals who cared about the safety of their savings or were ready to accept only minor losses at most. These were, inter alia, existing customers who used traditional deposits, savings accounts, structured deposits or unit-linked life insurance plans. Apart from misselling, Idea Bank was also misleading them about the investment risk. It disseminated false information about the guarantees, which were supposed to ensure a profit. However, NSFIZ Trigon Profit funds concluded guarantee agreements with GetBack company (currently undergoing restructuration), which was experiencing huge financial problems.

There was no mention of the extremely risky nature of this product, which I have only became aware of now, when it turned out that the unit value is about 50% of the nominal price and the guarantees are not being exercised. Never was there any mention of possible losing even a small part of the capital - one of the consumers wrote in a complaint to the Office.

President of UOKiK Tomasz Chróstny has ordered Idea Bank to pay compensation to all consumers who purchased investment certificates issued by Lartiq (formerly Trigon) Profit XXII, XXIII, XXIV NS FIZ. Each of them will receive PLN 38 thousand. In total, the company is to pay out several million PLN to consumers. Idea Bank has to inform injured consumers about the possibility of applying for compensation. It is also obliged to post on its website information about the decision of the President of UOKiK together with an acknowledgement that the decision does not prevent consumers from pursuing individual claims.

Unit-linked life insurance plans

In his subsequent decision concerning Idea Bank, the President of UOKiK stated that the bank provided consumers with unreliable information about another high-risk financial product. It concerns the possibility of joining unit-linked life insurance plans with funds engaged in NS FIZ. The Company was unreliable in providing information to consumers about the risk associated with such an investment, i.e. the possibility of losing all or part of the money, delays in redemption and lack of profit. According to the complaint, the bank's employees were supposed to reassure consumers that it was a safe investment with no loss of invested funds.

President of UOKiK Tomasz Chróstny imposed over PLN 11.5 million (PLN 11,511,449) fine on Idea Bank. Furthermore, the company must communicate the decision on its website.

Structured Investment Deposit

The irregularities resulting in the infringement of the collective interests of consumers also occurred in the offering of structured investment deposits by Idea Bank. Also in this case, consumers were misled as regards, inter alia:

• The document "Terms and Conditions of Structured Investment Deposit" highlighted information about the possibility of making profit in the form of interest at the expense of clear and legible data about the risk - circumstances under which the investment may not generate income or even generate losses.
• The document was drafted in such a way that consumers could get the impression that the parameters of the contract are binding, while its final terms may be different.
• Idea The Bank also claimed that the "deposit amount", i.e. the money invested without interest, is covered by the protection of the Bank Guarantee Fund (BFG). In fact, however, the BFG guarantees only concern the 'redemption amount', which may be lower.

President of UOKiK Tomasz Chróstny imposed over PLN 5.7 million (PLN 5,750,545 ) fine on Idea Bank for its unfair practices. The company must also communicate the decision on its website.

Prohibited (abusive) clauses

The last decision regarding Idea Bank concerns prohibited clauses in model agreements for e.g. consumer loans, savings and settlement accounts or debit and credit cards. These are the so-called modification clauses, in which the company lists the reasons that entitle it to introduce changes to the regulations or to the fee and commission table. These include, inter alia, changes in regulations, court judgements, introduction of new services by the bank or the need for editorial changes.

The contested modification clauses were included in, inter alia, fixed-term agreements, e.g. for consumer credit or credit card, under which the customer becomes indebted. According to the President of UOKiK, such agreements should be long lasting and, as a rule, cannot be changed.

The President of OCCP also raised concerns about the modification clauses in contracts concluded for an indefinite period of time. While they are legally permissible, the rationale for the introduction of changes by Idea Bank was formulated too vaguely and gives the company much room for interpretation.

All the modification clauses under consideration also entitled Idea Bank to unilaterally change provisions that are abusive during the term of the agreement, and such an action by the entrepreneur is prohibited.

President of UOKiK Tomasz Chróstny forbade the use of the disputed contractual provisions in the template agreements. Idea Bank must communicate this decision to all consumers whose contracts with the bank contain such clauses and include a statement about the decision of the President of UOKiK and its consequences on its website.

All the decisions referred to are ineffective. Idea Bank may appeal against them. Once the decisions of the President of UOKiK become legally binding, they will have the status of a prejudicial ruling. This means that their conclusions regarding the unlawfulness of the bank's actions will be binding on the common court. For consumers, this will be helpful when pursuing claims.

Consumer support:

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Consumer ombudsmen – in your town or district
Regional Consumer Centres: Phone: +48 22 299 60 90 – Dlakonsumenta.pl

Additional information for the media:

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