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Office of Competition and Consumer Protection

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Investment certificates with Get Back guarantees? - a fine of over 7.2 million PLN for Lartiq (formerly Trigon)

< previous | next > 30.07.2020

Investment certificates with Get Back guarantees? - a fine of over 7.2 million PLN for Lartiq (formerly Trigon)
  • Lartiq (formerly Trigon) has misled consumers by offering investment funds.
  • Consumers were assured that their “capital was fully secured” and were not informed about the risks associated with GetBack guarantees.
  • The President of the Office of Competition and Consumer Protection (UOKiK), Tomasz Chróstny, imposed a fine of over 7.2 million PLN on Lartiq.

Lartiq (formerly Trigon) has violated consumer rights by including unreliable information in product presentations and other documents used to issue investment certificates - asserted Tomasz Chróstny, President of the Office of Competition and Consumer Protection. The irregularities concerned the issue of Lartiq (formerly Trigon) Profit XVIII, XX, XXI, XXII, XXIII, XXIV, XXX Non-standardised Securitization Closed-End Investment Funds (NS FIZ).

Lartiq offered complex and very risky financial products - investment certificates issued to raise funds to purchase debt portfolios. However, it presented them to consumers as an instrument between a bank deposit and a classical investment fund. Product presentations indicated that the guarantee agreement constituted a “full security of capital”, with a minimum rate of return of 5-6% (depending on the fund). The guarantor of Lartiq (formerly Trigon) Profit XVIII-XXIV NSFIZ funds was GetBack (now under restructuring), whose financial problems became apparent in spring 2018 in connection with its corporate bonds. Lartiq - as can be seen from the company's internal correspondence - was aware of those problems earlier, even before the issue of Lartiq (formerly Trigon) Profit XX-XXIV NSFIZ fund certificates. Nevertheless, it did not inform consumers about the risk associated with the possibility of GetBack's failure to meet its obligations in terms of fund asset management and guarantees granted. In presentations to clients, Lartiq used historical data for GetBack from 2013-2015.

“The investment certificates of Lartiq funds were purchased by consumers who had neither specialized knowledge nor experience in investing in complex financial products. Many of them simply wanted to put their savings in the right place, e.g. with a view to future retirement. Surveys conducted by UOKiK among more than one hundred purchasers of Lartiq certificates show that most of them were guided by such criteria as capital protection, certainty of investment, lack of risk, and security when making the decision on the investment. Misleading these people, hiding full information about the risk was unethical and absolutely unlawful,” says Tomasz Chróstny, President of UOKiK.

One of the consumers wrote in the survey: The safety of the product was clearly emphasized, as well as the “assurance of its guarantee” through cooperation and GETBACK security, followed by Lions and Idea Banks and then the Bank Guarantee Fund. In the end I invested my retirement severance pay. Another consumer added: I myself stressed several times that I have to be sure about the guarantee of 100% return on capital and guarantee of profit, because I deposited my savings, which I also had in other banks (...). I thought that the subscription functioned like when opening a deposit.

For practices violating collective consumer interests, UOKiK President Tomasz Chróstny imposed a financial penalty on Lartiq in the total amount of over PLN 7.2 million (PLN 7,267,124). The company is also obliged to inform all consumers who purchased investment certificates of the aforementioned funds about the decision. They will also find out from the correspondence that they can demand from the entrepreneur to repair the damage, i.e. to cancel the contract with the obligation to reimburse the performance received and reimburse the costs related to the purchase of the product. The decision against Lartiq is not yet final and the company may lodge an appeal with the court.

Recently, the President of UOKiK also found irregularities in Idea Bank's offering of investment certificates for Lartiq funds. The Bank misled consumers about the risk of this investment and offered it to people who cared about the safety of their money, thus using misselling. According to the decision of the President of UOKiK, Idea Bank is to pay the affected consumers PLN 38,000 each in compensation.

Consumer support:

Phone: +48 801 440 220 or +48 22 290 89 16 – consumer helpline
E-mail: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Consumer ombudsmen – in your town or district
Regional Consumer Centres: Phone: +48 22 299 60 90 – Dlakonsumenta.pl

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

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