The Supreme Court has upheld the Financial Ombudsman’s extraordinary complaint on the settlement of early repayment of a credit
After a court battle lasting several years, borrowers who repaid their credits early will receive a refund of part of the commission previously charged by Alior Bank. This is the result of an extraordinary complaint by the Financial Ombudsman. This decision is important for all customers with whom banks have refused to settle, despite paying off their liabilities earlier than the agreement and the schedule would indicate.
The case originated in February 2016, when Alior Bank customers took out a consumer credit of PLN 50 thousand. The bank charged PLN 16.7 thousand for granting the credit, and the total liability was to be repaid over a period of 10 years. However, the customers managed to repay the credit in full after just 14 months. In accordance with the law, they therefore expected a return from the bank of the proportional value of the commission, i.e. almost PLN 15 thousand. However, the bank had no intention of settling this liability. The case ended up in court, as the borrowers filed a lawsuit for payment.
The District Court in Kielce, which was the court of first instance, found the claimants’ arguments justified and awarded the amount indicated in the claim. Alior Bank filed an appeal, as a result of which the District Court in Kielce, as the court of second instance, changed the judgement and dismissed the claim, arguing that Article 49 (1) of the Consumer Credit Act does not justify the customers’ claim and that the commission is not a cost related to the term of the loan.
From the outset, the Financial Ombudsman shared the view of the court of first instance that the bank should refund part of the commission to the borrowers as a result of early repayment of the credit. In the event of early repayment of a consumer credit, the total cost of such credit is reduced proportionately.
The Financial Ombudsman did not share the view of the court of second instance, considering that the judgement was in flagrant breach of law, and since the judgement could not be challenged by means of an appeal against the sentence, the Financial Ombudsman decided to file an extraordinary complaint.
As a result of the examination of the extraordinary complaint filed by the Financial Ombudsman, the Supreme Court upheld the arguments presented in the complaint and set aside the contested final judgement of the District Court in Kielce. The bank was also ordered to pay the costs of the appeal.
For the borrowers, this means that the judgement of the court of first instance, ordering the refund of the commission for early repayment to them, is a final judgement, and the bank should pay the customers the amount claimed in the lawsuit together with the claimed interest specified in the operative part of the judgement of the court of first instance.
The Financial Ombudsman has repeatedly presented his position on the interpretation of this provision. According to it, in the event of early repayment of a consumer credit, the total cost of such credit is reduced. The nature of these costs and when they were actually incurred by the borrower is irrelevant. This reduction is proportional, i.e. it relates to the period between the actual repayment of the credit and the final repayment date stipulated in the agreement. Settlement of credits according to such rules may be claimed by all customers who entered into an agreement after 18 December 2011. At that time, the provisions of the Consumer Credit Act entered into force, governing, inter alia, the principles of settlement of credits repaid earlier.
Early repayment obliges banks to refund the commission
The court’s decision is important for anyone who has been refused by a bank or loan company the lawful settlement of a credit repaid earlier. The course of action depends on how the dispute ended.
If the case has already been finally decided by a court and the court has dismissed the customer’s claim, it is possible to request the Financial Ombudsman to file an extraordinary complaint. However, this only applies to final judgements made after 3 April 2018. If the case is still pending in court, it is possible to request the Financial Ombudsman to provide an important view on the case.
Customers who have repaid a consumer credit earlier, but have not received a pro rata refund in accordance with the law can still pursue claims. A complaint should first be made to the bank or loan company. If it is not accepted, the Financial Ombudsman can be requested to intervene.
Important! When to file a request for an extraordinary complaint to the Financial Ombudsman?
Requests to the Financial Ombudsman to file an extraordinary complaint may relate to decisions ending proceedings in a case which became final after 3 April 2018. Only the Attorney General and the Ombudsman have the power to make an extraordinary complaint in respect of cases decided before that date.
It is worth emphasising that an extraordinary complaint is intended to apply to truly exceptional situations. One of the three prerequisites must be present:
the judgement violates the principles or human and civil liberties and rights set forth in the Constitution;
the judgement grossly violates the law by being misinterpreted or misapplied;
there is a clear contradiction between significant findings of the court and the content of evidence gathered in the case.
In addition, an extraordinary complaint will also be allowed only if the contested decision cannot be changed or reversed by other extraordinary means of appeal. Moreover, an extraordinary complaint may not be based on allegations that were the subject of an appeal against the sentence or cassation examined by the Supreme Court. In addition, an extraordinary complaint may be brought only once against the same judgement in the interests of the same party.
In order for the Financial Ombudsman to be able to prepare an extraordinary complaint, it is essential that he is provided with as complete a record of the case as possible. That means the applicant must describe the objections to the judgement, present the pleadings, the judgements of both courts with reasons, and the evidence. Only on this basis can the Financial Ombudsman decide to apply to the Supreme Court. Ideally, such a motion should be prepared by a professional attorney who already knows the case and has handled it in previous instances. He will also know best which prerequisites for filing an extraordinary complaint are met in a given case. Of course, this is not a formal requirement. If someone cannot afford to engage an attorney, the Financial Ombudsman’s lawyers will perform such an analysis based only on the documentation provided.
