Credit holidays under the microscope of the Office of Competition and Consumer Protection. The fine amounts to nearly PLN 119 million
Credit holidays, introduced by the Act on assistance to borrowers, were supposed to be support in the period of high interest rates. From August 2022 until the end of 2024, consumers could suspend the repayment of a maximum of 12 mortgage installments. From the beginning, the Office of Competition and Consumer Protection monitored banks' practices, conducting a total of 17 explanatory proceedings, and most institutions, after the office's intervention, corrected solutions deemed unfavorable to customers.
The final stage of the proceedings regarding Bank Pekao SA and Pekao Bank Hipoteczny SA concerns the application execution model, which – according to the Office of Competition and Consumer Protection – was inconsistent with the Act and applied systematically in both institutions at the same time.
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Shorter holidays and then longer repayment
The first problem concerned the shortening of the suspension itself. If the client submitted the application in the last month of the quarter in which suspension was due, banks were to grant it not for a full month, but from the date of submitting the application to the end of the month.
In practice, this meant that instead of the statutory month, the client received, for example, several days, as in the example of the application from March 15, 2023, where the suspension was granted only until March 31.
The second element was, according to the Office of Competition and Consumer Protection, particularly financially painful. Despite the shorter actual suspension banks automatically extended the loan period by a full month. This could mean that the loan was repaid longer than expected during the “holidays”, and as a consequence, the total cost of the loan could increase, especially due to additional interest.
The President of the Office of Competition and Consumer Protection, Tomasz Chróstny, emphasized that such action weakened the benefit guaranteed by the Act.
A fine of nearly PLN 119 million and an obligation to inform customers
President of the Office of Competition and Consumer Protection for incorrect execution of applications imposed penalties in the total amount of nearly PLN 119 million: to Bank Pekao SA in the amount of PLN 117 million 801 thousand. PLN, and to Pekao Bank Hipoteczny SA in the amount of PLN 1,183 thousand. PLN 304 The Office also obliged banks to inform every consumer affected by these practices about the violations.
The Office of Competition and Consumer Protection indicates that the irregularities were of a systemic nature and concerned mainly customers submitting applications during the last month of the quarter or covering more than one month, including the month ending the quarter. According to information from the office banks ended the practice of disproportionately extending the loan period on December 31, 2023, and shortening the repayment suspension period – on December 31, 2024.
The decisions are not final. Banks may appeal against them to the Court of Competition and Consumer Protection.
