Early repayment of consumer loans. The next decisions of UOKiK regarding loan companies
The President of the Office of Competition and Consumer Protection (UOKiK) has issued decisions regarding 18 loan companies in relation to settlements in case of early repayment of a consumer loan.
In July, the Office of Competition and Consumer Protection informed that as a result of the UOKiK's efforts, the customers of 14 biggest banks can already count on a proportional reimbursement of fees for an earlier repayment of a consumer credit or loan according to the straight-line method. The Office also safeguards the interests of consumers who are in a similar situation but have borrowed money from non-banking institutions. Following the ruling of the Court of Justice of the European Union of September 2019, which dispelled the last doubts regarding settlements of early repayment of consumer credit, the President of UOKiK has issued decisions regarding 18 loan companies. Another 4 proceedings are pending, involving the charge of violation of Article 49 of the Act on Consumer Credit, and 5 explanatory proceedings.
“In the situation of early repayment of consumer loan, banks and loan companies must honestly settle all fees and commissions charged. I held a number of meetings with financial sector representatives, during which I argued that a straight-line method should be used to calculate the return, as this method is clear, transparent and fair to consumers. I encourage consumers who have repaid a credit or a loan earlier to file a complaint to get their money back according to the straight-line method”, says Tomasz Chróstny, the President of UOKiK.
According to the estimates of the Office of Competition and Consumer Protection, consumers can recover about PLN 1.5 billion from banks and loan companies due to the early repayment of a consumer loan or loan - it is worth submitting a complaint as soon as possible, which is the basis for recovering funds collected from customers as part of fees and commissions. A proportionate part of them must be returned to consumers in the event of early repayment of the financial product.
The straight-line method is based on the principle that the financial institution divides all costs by the number of calendar days during which the contract was to apply. The result is multiplied by the number of days by which the credit period was shortened - and this is the sum that should be returned to the consumer.