• The President of UOKiK Tomasz Chróstny has issued a decision regarding Fundusz Hipoteczny Yanok (Yanok Mortgage Fund), which issues the so-called investment bills.
• The entity, with the use of the money of customers, grants risky loans to businesses and provides misleading information to customers about the safety and profitability of investment bills.
• The President of the Office has brought charges against another entity, Brewe Leasing, that offers investment bills under the name "Kwity dochodowe'' (income receipts).

Fundusz Hipoteczny Yanok, registered office in Kraków, is a company that issues the so-called investment bills. A customer entrusts money to the entity that issues an investment bill and, then, the entity uses the funds to grant loans to other businesses that are often in debt and poor financial situation. In July last year, the President of the Office issued a consumer warning against investing funds in this type of risky operations, which was upheld by the Court. The President of UOKiK issued a decision stating that FH Yanok:

• uses investment bills in a manner inconsistent with their function and uses customers' money to grant loans to businesses and thus transfers all the risk of conducting the business to customers.
• provides misleading information to customers with regards to the safety of funds entrusted to FH Yanok, about the lack of risk and guarantee of profit.

"An investment bill'' is a written commitment made by the issuer to pay a specified amount of money at a specified time. In commercial transactions, an investment bill is a security for the repayment of a debt. However, the term "Weksel investycyjny'' (investment bill) does not exist in the regulations - therefore, it can be recognised that the term was created by entrepreneurs to describe another product that would allow them to raise capital and an attempt to circumvent the provisions on the issuance of corporate bonds. The provisions on financial instruments or public offerings do not apply to investment bills, e.g. information about the risk, the value of the security of investment bill, the issuer and the business activity is not required. Hence, all the risk is borne by the consumer, who has no guarantee to get a refund or gain profit.

–  We do not dispute the right to issue investment bills - it a common way to secure repayment of a debt and they have existed in law since 1936. Our concern, however, is the use of investment bills for purposes inconsistent with their function. FH Yanok uses investment bills as a way to raise capital with the use of the money from consumers, putting their funds at significant risk. By doing so, FH Yanok provides misleading information to consumers, also giving them a false sense of security of their investments and gaining potential profits, while, in fact, the interests of FH Yanok are protected - says Tomasz Chróstny, the President of UOKiK.

Investment bills that are issued by FH Yanok are not used to secure the repayment of liabilities, and their purpose is to obtain funds to finance current business activities, including in the area of offering risky loans to other entrepreneurs.

FH Yanok provides misleading information regarding the safety of the investment, its profitability, comparing it to a bank deposit or bonds. By doing so, FH Yanok, tries to make the operations credible in the eyes of potential customers. FH Yanok informs customers that it is a "simple investment with a guaranteed return of capital", "profit from 5% to 10%", "the level of risk of the investment is low". The entity uses phrases such as "inwestycja'' (investment), "emitent'' (issuer) and "emisja'' (issuance) which gives the appearance of a professional transaction involving the issue of securities. However, the financing model of the entire project is risky, as it assumes that until the redemption date of the investment bill, FH Yanok is the sole holder of the consumer's money. FH Yanok makes decisions on what to use the money for and one of the options is to provide loans to indebted businesses. The customers have no control or guarantee of how or on what their money will be used. As a result, there is no guarantee that the customers will get the money back.

For violating the collective interests of consumers, the President of the Office of Competition and Consumer Protection (UOKiK) imposed on Fundusz Hipoteczny Yanok a penalty of approximately PLN 400 thousand  (PLN 389 794) and ordered the cessation of the practices, with immediate effect.

The customers who entrusted their money to the entity shall receive letters from the entity informing them of the decision. The decision shall also be published on the website of FH Yanok. The decision is not final - the company has the right to appeal to the Court of Consumer and Competition Protection.

The case is also investigated by the Regional Prosecutor's Office in Kraków. The President of UOKiK also forwarded information about the activities of FH Yanok to the General Inspector of Financial Information.

The President of the Office of Competition and Consumer Protection  also conducts proceedings against Brewe Leasing, registered office in Warsaw, which offers investment bills under the name "Kwit dochodowy" (income receipt) - the consumer pays the money in, receives the income receipt, and the customer's funds are used by the entity to finance leased assets, e.g. car purchases, the entity also purchases receivables as part of factoring services. Brewe Leasing informs customers that the investment is profitable, with potential profits ranging from 7.5 % to 9,5%. According to the findings of the Office, the entity enters into leasing agreements with businesses that are unable to receive a bank loan. Moreover, consumers are not handed over the investment bills as they are stored in a deposit, the controller of which is the entity selected by Brewe Leasing - which can make it difficult to enforce claims. The allegations of the President of the Office of Competition and Consumer Protection concern raising capital in a manner that violates good practice and is misleading with regards to security and financial benefits. There is a penalty for violating the collective interests of consumers, of up to 10% of the turnover.

Dear Consumer, please be responsible with regards to offers concerning investment bills. Please check the answers to frequently asked questions at the website finanse.uokik.gov.pl. Please remember that:

• The term "Weksel inwestycyjny'' (investment bill) does not exist in the regulations. The term was invented by entrepreneurs to describe another product that allows them to raise capital.
• The only guarantee of the security of the investment bill is the solvency of its issuer - they are not secured by the guarantee system of the Bank Guarantee Fund.
• If the issuer of the investment bill declares bankruptcy, customers may not get their money back.
• The offers include incorrect information about the guaranteed rate of return and the safety of investment bills - meanwhile, the investment is subject to serious risk.

Consumer assistance:

Telephone number: 801 440 220 or 22 290 89 16 – consumer hotline
E-mail: porady@dlakonsumentow.pl
 Consumer advocates – in your town or district

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: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL