“Rolling over loans”. What is this? The Office of Competition and Consumer Protection imposed severe penalties on 7 companies

Luc Williams

The President of the Office of Competition and Consumer Protection (UOKiK) imposed a total of over PLN 10 million in penalties on seven lenders and consumer credit intermediaries, the office announced. The punished entities were involved in “rolling” loans, i.e. granting loans to consumers alternately to repay the original debt.

“All the described companies created a model that allowed them to charge higher commissions than allowed by law. Each of them calculated the commission for loans taken out to repay growing debt separately. Refinancing in practice consisted in taking out another loan alternately. This allowed lenders to charge higher commissions than if each of them “They granted another loan to repay a loan previously granted 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, therefore our decisions could not have been different,” said the president. UOKiK Tomasz Chróstny, quoted in the announcement.

Ekstraportfel.pl, extraportfel.com.pl…

The Office of Competition and Consumer Protection took action following complaints and signals from consumers who used the services of related companies offering loan refinancing. The first decision concerns Creamfinance Poland and three others related to it by capital: MDP Finance, KIM Finance and JJK Credit. The second decision concerns the Szybka Gotówka company, which operated together with two entities: Gwarant24 and Centrum Rozsolutionów Kredytowych, it was reported.

For violating the collective interests of consumers, the Office of Competition and Consumer Protection imposed a financial penalty on Creamfinance Poland of PLN 2,949,471. Three related entities were also fined: MDP Finance – PLN 1,885,941, KIM Finance – PLN 2,545,098 and JJK Credit – PLN 88,833. For the same practice, Szybka Gotówka was fined PLN 86,043 and two entities related to it: Gwarant24 – PLN 1,359,986 and Credit Solutions Center – PLN 993,822. In addition, information about the decisions of the President of the Office of Competition and Consumer Protection is to be sent to injured customers in postal and e-mail correspondence, as well as in the form of a statement sent to websites offering loans, it was also announced.

At the same time, the Office of Competition and Consumer Protection fined Creamfinance Poland PLN 632,029 for failing to provide consumers with an information form before concluding a loan agreement.

As the Office explains, 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 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 the following entities: MDP Finance, KIM Finance and JJK Credit.

Szybka Gotówka, Gwarant24 and Credit Solutions Center

When repaying another debt, the mechanism was identical – companies related to Creamfinance concluded subsequent loan agreements with it in turn. The money never reached the borrowers. They kept paying off the costs of subsequent loans. For example, a consumer borrowed PLN 2.4 thousand. zloty. After a series of successive refinancing agreements, he ended up with several loan agreements with a total commission amount of over PLN 2,500. If there was no violation of the law, the maximum fees incurred by the consumer in this case would amount to approximately PLN 850.

A similar method of operation was adopted by three other related companies: Szybka Gotówka, Gwarant24 and Centrum Rozsolutionów Kredytowych, which granted loans via the websites www.szybkagotowka.pl and www.freezl.pl. In this case, the companies used the so-called self-refinancing, i.e. they granted subsequent loans to finance previous liabilities without the consumer’s express request, and this mechanism could be repeated many times, causing an avalanche of debt growth.

“As a result of illegal activities, the consumer incurred costs exceeding the maximum non-interest costs of the loan. If the loan refinancing was carried out 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 charges collected during this time the fees 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,” the Office of Competition and Consumer Protection emphasized.

The decisions issued are not final and entrepreneurs may appeal against them to court.


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