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Office of Competition and Consumer Protection

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Loan repayment holidays - charges for 3 banks

< previous | next > 08.09.2022

Loan repayment holidays - charges for 3 banks
  • Preventing consumers from applying for loan repayment holidays for all terms with the use of one application - such actions may result in fines for banks.
  • President of UOKiK Tomasz Chróstny has pressed charges of infringing collective interests of consumers of BNP Paribas, Getin Noble Bank and Bank Pocztowy.
  • As a consequence of the actions assumed by the Authority, all the banks have stopped unlawfully frightening their consumers with negative consequences of entering them in the Credit Information Bureau (BIK), they will additionally provide the customers the opportunity to submit the application for loan repayment holidays on the instalment payment date.

For more than a month consumers have been entitled to loan repayment holidays - for one mortgage loan taken out in Polish currency to finance their own housing needs. The Credit Information Bureau (BIK) has provided the data proving that until 30 August loan repayment holidays had affected 876 thousand loans of PLN 228 billion which had been used by 44 per cent of eligible individuals. This group includes as little as 0.1 per cent of the value of loans whose owners suffer from difficulties in repayment (delays exceeding 90 days), which means that the capacity to suspend instalments may still be feared by the persons who are in most urgent need for loan repayment holidays. UOKIK has received approximately 900 complaints, including those indicating that banks may hinder consumers the use of loan repayment holidays and discourage them from it.

From the very beginning, President of the Office of Competition and Consumer Protection has been monitoring the practices of banks pertaining to granting loan repayment holidays and informing about them. Explanatory proceedings against 17 banks are now pending.

- We have been currently asking individual banks for rectification of identified irregularities. We now have measurable results of those actions - we have eliminated frightening consumers with negative consequences of entering them in BIK or requirement for submitting application for loan repayment holidays in advance, among others. As a result of our calls, most banks let their consumers choose if they wanted to suspend all legally permitted instalments in one application or do it step-by-step in a few independent applications. Three banks to have failed to change it yet have been charged of infringing consumer collective interests - says Tomasz Chróstny, President of UOKiK.

Independent applications - charges for 3 banks

In accordance with the act on social financing for economic ventures and aid for borrowers consumers are entitled to suspend loan repayment for maximum 8 months. These include the following: August and September 2022, 2 selected months in Q4 2022 and 1 selected month in each quarter in 2023. The selected term or terms should be stated in the application. The laws enable the consumers to submit their applications in paper or electronic version, including via electronic banking. Therefore, if a bank offers electronic banking services, it should provide the opportunity to submit application with the use of it as well.

The laws allow consumers to choose - they may enter all 8 months in one application at once or submit independent applications one by one for the suspension of one or a few instalments. However, a lot of banks required independent application for every single term. Following the calls by the President of UOKIK, a vast majority of them have stepped back from this practice. Only BNP Paribas Bank Polska, Getin Noble Bank and Bank Pocztowy continue not to accept one application for all selected terms in their electronic banking system. The President of UOKiK has charged them with infringing the collective interests of consumers. This is subject to a fine of up to 10 per cent of the annual turnover.

What changes beneficial for consumers have taken place?

As a result of UOKiK endeavours:

  • currently no bank places false information on its website suggesting negative consequences related to providing information on loan suspension in connection with loan repayment holidays to BIK;
  • all the banks have provided the opportunity to submit the application for loan repayment holidays from the date of the act effectuation, that is, from 29 July 2022;
  • banks have stepped back from the demand to submit applications for the suspension of loan instalment repayment in advance. Currently - as provided for in the relevant laws - consumers may do it even on the instalment payment date.

Problems with loan overpayment

- I encourage consumers to take advantage of loan repayment holidays. In particular, let me appeal to the persons who are suffering from some problems with loan repayment - suspension of instalments will help them collect funds for paying the arrears and improve their financial standing. On the other hand, borrowers whose financial standing is better may allocate the money saved thanks to loan repayment holidays for loan overpayment. This should result in the repayment of the principal, which will make future financial load lower. Unfortunately, we have noticed some irregularities at some banks, too. They will face consequences unless they change their practices - says Tomasz Chróstny, President of UOKiK.

The problem pertains mainly to unlawful deduction of interest by banks when the consumer who takes advantage of loan repayment holidays makes an overpayment. Currently we are analysing the signals we have received, we have already asked one of the banks regarding this matter to present clarifications and rectify the irregularities, for subsequent banks requests are being prepared.

Consistent loan overpayment means extensive savings in interest and a relief for the future. For example, a borrower with a loan of PLN 300 thousand for 30 years, with the interest rate of 9% and monthly instalment of approximately PLN 2413 (where only PLN 164 is the principal while the rest is the interest), when suspending payment for 8 months may overpay the amount of PLN 19.3 thousand. Assuming that in the future the interest rate would fall on average to 5% p.a., the principal overpayment amounting to PLN 19.3 thousand, while shortening the lending period by four years, would allow to save as much as PLN 57 thousand on future interest. If current high interest rates prevailed for longer term, the savings would be even higher.

Check benefits from overpaying your loan at our financial calculator. You will find it at finanse.uokik.gov.pl. Recently, the calculator has been equipped with a new function - you can also check whether you are eligible for the Borrowers Support Fund.

Other problems with loan repayment holidays to be solved

Consumers have been also complaining to UOKIK about the following:

  • incorrect repayment schedules following the use of the loan repayment holidays proving subsequent interest charge or showing updated and excessively increased instalments. The problem now pertains to 8 out of 17 banks. As a result of our calls, banks have declared to correct their systemic errors;
  • refusal to suspend the payment of a “mortgage loan” with no content-related examination whether the product is a mortgage loan satisfying the criteria provided for in the act or not. If the agreement was concluded in order to satisfy one’s own housing needs, the mortgage loan should be subject to loan repayment holidays. A lot of banks have already implemented relevant changes or declare that they are pending;
  • lack of justification or laconic justification by banks of the refusal to suspend loan repayment, incorrect interpretation of statutory provisions;
  • long term - exceeding 21 days - for examination of applications for loan repayment holidays;
  • situations where unsuccessful suspension of the loan repayment, e.g. “losing the application” in the bank’s system or its too long examination, have resulted in the instigation of debt collection procedure for unpaid instalment by entities cooperating with banks.

- We have been watching those practices and have kept on asking banks for clarifications on an ongoing basis. At the same time, we do not preclude taking further actions, including pressing charges in connection with law infringement - says Tomasz Chróstny, President of UOKiK.

Consumer Support:

Phone: 801 440 220 or 222 66 76 76 – consumer helpline
E-mail: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
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: 22 55 60 246
Email: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL
You can also follow us on Instagram: @uokikgovpl

Attached files

 

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