These companies offered loan rollovers. They have to pay a fine of over PLN 10 million

the office of Competition and Consumer Protection received complaints from consumers who used the services of related offering companies refinancing loans. After the activities carried out, the President of the Office of Competition and Consumer Protection concluded that the collected material was confirmed use of practices leading to circumvention of the law and issued decisions against dishonest entrepreneurs. The first concerns the company Creamfinance Poland and those related to it by capital MDP Finance, KIM Finance and JJK Credit. The second decision concerns the company Fast Cashwhich operated together with two entities Gwarant24 and Credit Solutions Center.

Loan rollover

A consumer looking for a quick loan landed on one of the websites: lendon.pl, lendon.com.pl, extraportfel.pl or extraportfel.com.pl. After opening an account and having the application approved, he received the money. Even before the repayment deadline, one of the companies from the Creamfinance Poland group she offered him a new loan to repay the previous one with a commission oscillating around the maximum costs provided for by law. These could be entities: MDP Finance, KIM Finance and JJK Credit. When repaying another debt, the mechanism looked identical: companies related to Creamfinance concluded successive loan agreements with it in turn. The money never reached the borrowers who they kept repaying the costs of subsequent loans. For example if the consumer borrowed 2.4 thousand zlotyafter a series of successive refinancing agreements ended with several loan agreementsabout the total amount commission amounting to over 2.5 thousand. If there was no violation of the law, the maximum fees incurred by the consumer in this case would be approximately PLN 850.

Illegal activities led to this the consumer incurred costs that exceeded the maximum non-interest costs of the loan. If the loan was refinanced in accordance with the regulations, a consumer who did not repay the loan within 120 days and took out another loan from the same entity would be protected. All fees charged at that time had to be within the limit of non-interest costs charged on the amount of the first loan.. By circumventing the law, the companies exposed borrowers to very high loan costs.

Three other related companies adopted a similar method of operation: Fast Cash, Gwarant24 and Credit Solutions Centerthat granted loans through the websites www.szybkagotowka.pl and www.freezl.pl. In this case, the companies used the so-called self-refinancingThat is granted subsequent loans to finance previous liabilities without the consumer’s express request. This mechanism could repeat itself many times, causing avalanche increase in debt.

All the companies described have created a model that allows them to charge higher commissions than permitted by law. Each of them calculated the commission for loans taken out to repay growing debt separately. In practice, refinancing consisted of taking out another loan alternately. This allowed lenders to charge higher commissions than if each of them made another loan to repay a previously granted loan to the same consumer. The commission oscillated around the upper limit of non-interest loan costs. In identical cases, common courts have repeatedly pointed out the illusory nature of such models created by lenders to circumvent the law, so our decisions could not have been different.

– said Tomasz Chróstny, President of the Office of Competition and Consumer Protection

Violation of consumers’ collective interests

For violating the collective interests of consumers, the President of the Office of Competition and Consumer Protection imposed the following penalties on entrepreneurs:

• Creamfinance Poland – PLN 2,949,471,
• MDP Finance – PLN 1,885,941,
• KIM Finance – PLN 2,545,098,
• JJK Credit – PLN 88,833,
• Fast Cash – PLN 86,043,
• Gwarant24 – PLN 1,359,986,
• Credit Solutions Center – PLN 993,822.

Information about the decisions of the President of the Office of Competition and Consumer Protection reach injured customers in postal and e-mail correspondence, as well as in the form of a statement on websites offering loans.

Penalty for missing the form

The President of the Office of Competition and Consumer Protection imposed an additional sanction on Creamfinance Poland PLN 632,029 behind failure to provide consumers with an information form before concluding a loan agreement. There is a loan information form obligatory and allows you to clearly present the terms of the contracted obligation. It always has the same pattern and scope of information, which makes it easier to compare offers in different institutions. Therefore, the lender must transfer it to the consumer before signing the contract.

Decisions issued are not legally valid – entrepreneurs have the right to appeal against them to court. More information can be found in decision no DOZIK 18/2023, DOZIK 19/2023 and RDG -13/2023.