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The Court secures the Financial Ombudsman’s claim in case involving “roll-over” loans

19 October 2021

KIM Finance Sp. z o.o. seated in Warsaw may not charge consumers any fees or commissions related to loan refinancing in excess of the limit set forth in the Consumer Credit Law, taking into account the limits provided for in Articles 36b and 36c of the Law. This is the effect of the decision of the District Court Warszawa-Śródmieście issued at the request of the Financial Ombudsman in case ref. no. I Co 1692/21.

On 4 August 2021, the Financial Ombudsman made a direct request to KIM Finance to stop the breaches. This company was involved in the process of ‘rolling over” the loan using a network of related companies. As a result, customers were charged in excess of the statutory limits. The Financial Ombudsman assessed this practice as reprehensible and highly harmful to consumers.

In connection with the company’s failure to change its practice, the Financial Ombudsman requested the District Court for Warsaw-Śródmieście in Warsaw to secure the claim for discontinuation of an unfair market practice against KIM Finance Sp. z o.o. with its registered office in Warsaw by way of a motion of 20 September 2021.

In practice, the court’s decision means that the company may not, in new agreements aimed at “refinancing” loans, include provisions concerning costs in excess of the statutory limits, while in current agreements it may not charge costs and fees in the amount specified in the agreement.

The Financial Ombudsman recalls that “rolling over” a loan consists of granting another loan to a consumer where the entire amount is used to repay a debt granted by another creditor. In such cases, the “new” creditor repays the capital and the costs imposed on the consumer. The problem is that the “new” contract comes with further costs, usually called “refinancing” or “contract extension” fees.

– In this way, the consumer falls into a debt spiral, where the amount to be paid keeps growing and the client is obliged to pay additional fees and further interest, because successive agreements are refinanced all the time – describes Dr. Habil. Mariusz Golecki, the Financial Ombudsman.

In the end, it turns out that from the initially relatively low amount of the loan, the consumer is obliged to return an amount even several times higher.  In the view of the Financial Ombudsman, this constitutes a circumvention of the provisions of Articles 36a and 36c of the Consumer Credit Law concerning maximum limits on non-interest credit costs. Such behaviour by some creditors may also be misleading and distort the average consumer’s market behaviour.

– Customer complaints to the Financial Ombudsman show that most often the lenders and credit intermediaries are linked by e.g. capital, personal links or conduct business activity within the same Internet platform, which allows for artificial creation of a sales network – says Paulina Tronowska, attorney-at-law at the Financial Ombudsman Office.

As a result of the search of conducted cases, the Financial Ombudsman found that KIM Finance granted loans in which the credit intermediary was Creamfinance Poland Sp. z o.o., while the loans themselves were granted via online platforms “Lendon.pl” and “Extraportfel.pl”. Importantly, the consumer loans were granted to refinance loans concluded through these platforms by other lenders who were also subsidiaries of the credit intermediary, Creamfinance Poland Sp. z o.o.

– We consider the practice described above as reprehensible and highly harmful to consumers. I am glad that the Court shared the Financial Ombudsman’s arguments about the unfair nature of such actions. – says Mariusz Golecki.

In this case, the Financial Ombudsman, acting pursuant to his powers under the Law on Counteracting Unfair Market Practices, acts on his own behalf to protect the interests of all clients of financial market entities. The Law in question empowers the Financial Ombudsman to demand the cessation of an unfair practice, to make a statement of a specified content and form or to pay a sum of money to a social cause.


The Financial Ombudsman’s website in Ukrainian
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