UOKiK has made its first decision about the sale of GetBack corporate bonds
The Office of Competition and Consumer Protection is taking strong action on irregularities related to the sale of GetBack corporate bonds. It has made its first decision on that matter. It pertains to Polish Brokerage House (PBH) for putting an abusive clause in contracts. What is more, there have been proceedings pending against Idea Bank since October. In this case, UOKiK accuses the bank of disseminating false information and mis-selling, i.e. offering products unsuitable for customers’ needs.
Polish Brokerage House provided GetBack with brokerage services, i.e. it drafted documentation related to the issue of GetBack bonds, handled them, and submitted offers for sale of such bonds to customers. PBH cooperated mainly with Idea Bank that made the offer to its customers. They could sign up for bonds by electronic means. The only thing to do was to fill in (usually a bank employee, not a consumer, did it) and send a form with the customer’s basic data. The form also included a provision saying that bond buyers did not receive any information that would be contrary to what is provided in the Bond Purchase Proposal or the Terms of Bond Issue. Consumers had no other option but to send such a document, thereby automatically accepting this provision, even if they did not mean to. UOKiK considered such a provision to be an abusive clause.
UOKiK imposed a fine over PLN 2 mln on PBH for using an abusive clause. When this decision becomes final and valid, the fine will go towards the Financial Education Fund, which was established earlier this year. Its purpose is to increase the financial awareness of Poles and conduct educational campaigns that will help consumers learn about their rights and allow them to better assess investment risk.
UOKiK has just initiated proceedings against GetBack. The Office accuses the company of using unfair market practices. Consumer complaints show that GetBack employees misled them giving untrue information about GetBack bonds and the company’s financial position.
In total, UOKiK is currently conducting eight proceedings on possible irregularities which occurred when GetBack-related financial products were offered for sale. One of them indirectly relates to GetBack. It involves Idea Bank and concerns offering life insurance as part of unit-linked insurance funds. It is possible that customers’ money could have been invested in investment funds related to GetBack. The Office pre-checks whether customers were informed about the risks involved.