Rules for Consumer Loans – lunchtime

The principles of consumer loans are based on the provisions of the Act on supervision of the financial market containing important regulations. UOKiK is constantly monitoring the consumer credit market and introducing a number of regulations that protect consumers who use non-bank loan companies (Metabanks). The maximum limit beyond interest loan costs and interest charged for late repayment is only some of the regulations introduced in 2016.

Every year, the office issues dozens of rulings regarding violations of collective consumer interests by loan companies providing payday loans . UOKiK makes every effort to increase the level of consumer protection effectively, because the paraffins do not always respect the rights of their clients. The highest number of objections are raised by exorbitant fees significantly raising the cost of loans and failure of Metabanks to disclose information obligations to consumers.

Reduction of payday costs

Reduction of payday costs

Until 2016, the amount outside the interest costs of loans was not limited. Metabanks could, therefore, exceed the accrued interest many times. New provisions of the Act on supervision over the financial market, which introduced significant regulations in this respect, including to the act on consumer credit. Currently, the amount outside the loan interest expense may amount to a maximum of 25% of its total amount and 30% of the variable amount, depending on the period for which it was incurred. In addition, all non-interest costs and fees may not exceed 100% of the total loan amount.

Find out more about this topic:

  • The costs of debt collection are too high in the opinion of the OCCP

You will not get a minute – they have to pay you back

You will not get a minute - they have to pay you back

The rules of consumer loans in accordance with the provisions also burden the Metabanks with the obligation to return the consumer all fees in the event of non-payment of a payment, also in the case when the contract is not concluded.

Interesting penal interest and recovery fees

Interesting penal interest and recovery fees

UOKiK also intervened in the matter of exorbitant fees for debt collection activities. He issued a decision in which he forbade Metabanks from using provisions in contracts that allowed them to charge fees that do not correspond to the actual costs of these activities. This applies to the costs of payment orders, which could reach up to PLN 50 for the second call and PLN 80 for the third call.

According to UOKiK, fees for such prompts should correspond to the costs of correspondence sent by traditional mail or a telephone prompt according to operator rates. Agreements of contracts giving Metabanks the option of charging and charging overdue fees for delay (eg in the amount of PLN 20 for each day of delay) have been questioned.

Articles that are worth reading:

  • Disadvantages of payday loans – learn about the disadvantages of quick loans
  • Advantages of payday loans – learn about the advantages of fast loans

They did not grant loans, but only charged for processing the application? – with this also the end!

They did not grant loans, but only charged for processing the application? - with this also the end!

UOKiK also dealt with dishonest non-bank companies that did not grant loans, but only collected and kept the preparation fees or for processing the application.

Contract and information obligations

 

The rules of consumer loans guarantee us that every lender is obliged to provide clients with reliable, real and complete information. This is in particular information about the actual annual rate of interest (APRC), the total amount to be paid and the repayment dates.

Borrow money responsibly – before you sign a contract, read it carefully

Borrow money responsibly - before you sign a contract, read it carefully

Please note the following details:

  • what is the total amount to be paid and how much is the APRC – the real annual interest rate on the loan, i.e. the sum of all costs to be paid in percentage on an annual basis,
  • whether a high security for the loan is necessary or the right to designate it is reserved in the future – the lender may request the promissory note to be issued as a security which allows issuing the order for payment without a court hearing. It should be ensured that he does not subject him to the obligation to pay a sum exceeding the loan amount. Additionally, it should be noted that the promissory note contains a “not on order” clause, which protects against transferring rights from the bill of exchange to another person or company,
  • whether there are additional fees – for example for issuing a decision, for processing an application, commissions, fees for visits of a parabank advisor at home, or even insurance . If they exist, then calculate them carefully and estimate if the sum of these fees does not increase the cost of the loan too much.

In case of problems or doubts – remember:

  • do not sign a contract if you do not understand it! If any part of it raises your doubt, immediately ask for clarification. Ask for details of the loan and the rules for its granting and repayment. If a non-banking loan company does not want to or can not explain these rules, it will be better to give up such offer,
  • in case of doubts, questions or dispute with the lending institution, immediately use the assistance of the Financial Ombudsman , municipal or poviat consumer ombudsmen , the Consumer Federation or the Association of Polish Consumers . You can also get free legal advice under the number 800 889 866 and e-mail – porady@dlakonsumentow.pl ,
  • remember that your protection on the financial market is strengthened by regulations , in particular the Act on competition and consumer protection and the provisions of the Act on supervision over the financial market , which implement key regulations, including to the act on consumer credit . From 1 January 2016, the Act on the Complaint Handling by Financial Market Entities and the Financial Spokes Officer is applicable.