• Banks: Pekao and Pekao Bank Hipoteczny failed to properly fulfil their obligations related to mortgage payment holidays.
• Both banks shortened the mortgage repayment suspension period and disproportionately extended the repayment period, exposing their customers to an increase in the total cost of the loan.
• For these practices, the President of UOKiK imposed a total fine of nearly PLN 119 million on the banks and obliged them to inform all affected parties of the violations.

In accordance with the Act on Social Financing for Economic Ventures and Aid for Borrowers, from August 2022 to the end of 2024, consumers were able to take advantage of so-called mortgage payment holidays, i.e. the suspension of up to 12 mortgage instalments. The aim of the Act was to assist borrowers at a time when high interest rates had caused a significant increase in mortgage instalments.

From the moment the regulations came into force, the President of UOKiK monitored how banks were complying with their statutory obligations. As part of 17 preliminary investigations, he continuously analysed how financial institutions were implementing mortgage payment holidays. As a result of the UOKiK’s intensive efforts, most banks amended practices that were unfavourable to consumers or that hindered the use of mortgage payment holidays. Investigations against several banks led to charges being brought. Currently, investigation concerning the practices of banks from the Pekao group – Bank Polska Kasa Opieki SA and Pekao Bank Hipoteczny SA are coming to an end.

Both banks used the same model for processing applications for mortgage payment holidays, which was contrary to the law. On the one hand, they shortened the period of suspension of loan repayments, and on the other, they disproportionately extended the loan period. For processing consumer applications for mortgage payment holidays in a manner inconsistent with the law, the President of UOKiK, Tomasz Chróstny, imposed fines totalling nearly PLN 119 million on both banks. They are also required to inform each consumer affected by the violations of the findings.

Shorter holidays…

In a situation where a consumer submitted a request for mortgage payment holidays in the last month of the quarter in which they were entitled to a suspension of payments, the suspension was not granted for the entire month, but from the date of submission of the request until the end of the month. This also applied to situations where the request covered several months, including the last month of the quarter. For example, a consumer who applied for a mortgage payment holidays on 15 March 2023 should have been granted a suspension for the entire month. However, the bank granted it only for the period from 15 to 31 March, i.e. 17 days.

…longer repayment period

In addition, regardless of the shorter suspension period, banks automatically extended the loan period by a full month. This meant that consumers repaid their loans for longer than the actual suspension period, which could increase the total cost of the loan, particularly due to accrued interest.

– The possibility of suspending part of the mortgage repayments was intended to provide real support to borrowers during a period of high inflation and a sharp increase in loan servicing costs. Extending the loan period beyond the actual suspension period exposed consumers to an increase in the total cost of the loan. As a result, the mortgage payment holidays were less beneficial than required by law – explains the President of UOKiK, Tomasz Chróstny.

Improper practices

The actions of both banks were systemic in nature and affected customers who submitted applications for repayment deferrals during the last month of the quarter or for periods covering more than one month, including the month ending the quarter.

The practice of both banks of disproportionately extending the loan period was discontinued on 31 December 2023, and the practice of shortening the loan repayment suspension period was discontinued on 31 December 2024.

Fines

For the incorrect processing of mortgage payment holidays applications, the banks are to pay fines in the following amounts:

• Bank Polska Kasa Opieki SA – PLN 117,801,000
• Pekao Bank Hipoteczny SA – PLN 1,183,304

Detailed information on the decisions can be found in the content of the decisions of the President of UOKiK. Both decisions are not yet final. Banks may appeal against them to the Court of Competition and Consumer Protection.