Contract clauses that too vaguely indicate the grounds for changing interest rates are prohibited, as are those used to establish the amount of mortgage loans indexed to the swiss franc and the principal and interest payments. Such is the standpoint material to a case Poland’s Office of Competition and Consumer Protection (UOKiK) submitted to the court hearing a consumer lawsuit against mbank

Poland’s amended Act on competition and consumer protection gave Poland the ability to present a court with a standpoint material to a case. Such opinions allow the Office to share its knowledge and assist the court in dispute settlement.

UOKIK has now twice presented the court with its standpoint. In the present case, consumers in a dispute with mBank filed the request for the Authority’s position. The mortgage holders questioned clauses found in agreements for credit pegged to the Swiss franc which they consider abusive. The loans are given in Polish zloty, but the capital is calculated in francs and functions as the basis for establishing the instalment amount and credit. The amount of the monthly payments is given in Swiss francs, but they are paid in Polish zloty after converting to CHF using an exchange rate established by the bank.

Two of the provisions being contested enable the bank to freely establish any buy and sell valuation of the franc. The bank did not indicate what criteria guided it in determining the rates. Because the bank assumed the right to unilaterally determine the indicator, and consumers were not able to verify the criteria adopted by the bank, UOKiK shared the borrowers view that the provisions should be prohibited.

A third clause imprecisely defined the grounds for changing the interest rate of the loan, including ones entitling the bank to arbitrarily determine the rate while not indicating what parameters might affect it. As a result, consumers were not able to predict when and by how much the bank may increase the instalment loan, or check the legitimacy of the bank’s activities.

UOKiK Vice President Dorota Karczewska said of the case, ”In UOKiK’s view, the clauses in question are prohibited and do not apply to customers. Because it is not possible to conclude an agreement without these provisions, the entire contract may become invalid”.

In practice, if there are forbidden provisions in a contract, the enterprise cannot rely on them. Its only recourse is to propose an alternative solution in a contract annex, which the consumer is not bound to accept. Only the court hearing the case may introduce a new provision to replace the prohibited clause as a means to settling the case. In the case of the contracts with mbank, however, it is not possible, on the basis of existing provisions, to replace the clause with another, because applicable regulations do not exist.

This led UOKiK to indicate in its standpoint that the credit agreement can be regarded as invalid.

The standpoint material to a case is

• the written position of UOKiK. It presents the Office’s arguments and point of view relevant to a given conflict, based on the particular factual and legal state of affairs. Therefore, the assessment presented in the standpoint cannot be used as a benchmark for other cases.
• issued only in cases ongoing before the court.
• provided  if it is in the public interest.
• Presented on UOKiK’s own initiative, at the request of consumers, an enterprise or the behest of the court.

In any case UOKiK assesses the facts and the law, the case law involved, and, in the case against mBank, the request made by the plaintiffs. The only other time UOKiK has provided its standpoint also involved a dispute between consumers and mbank over changes the latter made to interest rates.

Additional information for the media

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: biuroprasowe@uokik.gov.pl

Twitter: @UOKiKgovPL