The Financial Ombudsman filed an extraordinary complaint to the Supreme Court regarding the default judgment in the case of Swiss franc loan holders. By the decision of the court, the bank’s customers may lose their homes. In the opinion of the Financial Ombudsman, the court should not make such a decision solely on the basis of an extract from bank books. It should have previously examined the provisions of the contracts in terms of prohibited clauses.
Customers who signed a 360-month mortgage loan agreement in 2008 requested the assistance of the Financial Ombudsman. They had borrowed 288,000 PLN, which was converted into approx. 150,000 CHF. The borrowers have been repaying the loan for over 10 years. Unfortunately, at some point they could not pay the installments on time. As a result, the bank terminated their loan agreement. Next, it filed a lawsuit demanding immediate payment of over 468,000 PLN. The amount was about 180 thousand PLN higher than the amount borrowed by customers due to the mechanism of indexation of the loan amount to CHF. During this period the exchange rate of this currency in relation to the zloty increased significantly.
As proof of the validity of the claims, it presented an excerpt from the bank books. The court decided that the circumstances of the case did not raise any doubts and allowed the claim. The defendant consumers did not have the support of a professional attorney at this stage. As a result, they failed to challenge the judgment effectively. Thus, the default judgment became final. At present, the borrowers are required to pay the entire amount requested, and based on the judgment the bank is carrying out execution of the release of their real estate.
The customers turned to the Financial Ombudsman for help. After reviewing the case files, the Ombudsman made a decision to file an extraordinary complaint.
– I believe that the ruling in this case is inconsistent with the principles of a democratic state ruled by law, violates the principles of consumer protection against unfair market practices and indicates a gross violation of procedural law – says dr. hab. Mariusz Jerzy Golecki, Financial Ombudsman.
In the opinion of the Ombudsman, conversion clauses referring to exchange rates tables set unilaterally by the bank, without indicating objective criteria, are non-transparent, leave room for the bank to act arbitrarily and thus burden the borrower with unpredictable risk and violate the equality of the parties. Therefore, they grossly infringe the interests of the consumer and are contrary to good practices.
– There is no doubt that in the present case the court should ex officio examine whether the provisions of the CHF-indexed mortgage loan agreement are unfair, which it undoubtedly did not do – says Mariusz Golecki.
If the court upholds the position of the Financial Ombudsman, it will reverse the judgment under appeal. Then the borrowers will have a chance to take legal proceedings in which the court will examine the contract in terms of abusive clauses and the consequences resulting therefrom. This may mean that they will have to pay several times less than the amount currently requested by the bank.
It is worth emphasizing that the action of the Financial Ombudsman in this specific case may affect other consumers. Other persons who are in a similar situation will have a chance to change final judgments by means of an extraordinary appeal.
When should a request for an extraordinary complaint be sent to the Financial Ombudsman?
Requests for the submission of an extraordinary complaint by the Financial Ombudsman may concern judgments ending the proceedings in cases which became final after April 3, 2018. Only the Public Prosecutor General and the Ombudsman are entitled to an extraordinary appeal in relation to cases settled before that date.
It is worth emphasizing that an extraordinary complaint is intended to concern genuinely exceptional situations. One of three conditions must be met:
the judgment violates the regulations or human and citizen freedoms and rights specified in the Constitution;
the judgment flagrantly violates the law due to its incorrect interpretation or application;
there is a clear contradiction between the essential findings of the court and the content of the evidence collected in the case.
In addition, the submission of an Extraordinary Complaint will also be admissible only when the judgment under appeal cannot be changed or reversed by other extraordinary means of appeal. Moreover, an extraordinary complaint may not be based on the charges that were the subject of a cassation appeal by the Supreme Court. Additionally, against the same decision, in the interest of the same party, an extraordinary appeal may be brought only once.
In order for the Financial Ombudsman to be able to prepare an extraordinary complaint, it is necessary to present him with the most complete documentation concerning the case. It is necessary to describe the objections to the decision, present pleadings, and judgments of the courts of both instances with reasons and evidence. The Financial Ombudsman may make a decision to apply to the Supreme Court only on this basis. The ideal solution would be to prepare such a request by a professional attorney who already knows the case and has dealt with it in previous instances. He will also know best what conditions for submitting an extraordinary complaint have been met in a given case. Of course, this is not a formal requirement. If someone cannot afford an attorney, the lawyers of the Financial Ombudsman will perform such an analysis only on the basis of the documentation provided.
