UOKiK imposed a fine of PLN 44.2 million on Santander CB for consumer loan practices

by   CIJ News iDesk III
2022-01-17   09:36
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The President of the Office of Competition and Consumer Protection (UOKiK) imposed a fine of PLN 44.2 million on Santander Consumer Bank (Santander CB) in connection with the questioned practices regarding granting consumer loans: including insurance costs in the total the loan amount and sending customers proposals to enter into contracts, many of whom did not receive any credit at all or had different terms, the Office said.

The President of UOKiK issued a decision in which he found that Santander Consumer Bank infringes the collective interests of consumers. Proceedings in this case were initiated on the basis of a notification from a consumer organization. Two practices raised doubts:

- adding the premium for the additional insurance service to the total loan amount. A consumer who takes a consumer loan with insurance at Santander Consumer Bank may credit its cost. However, the bank illegally includes the cost of insurance premiums in the total loan amount. The questioned practice continues despite the decisions of the President of the Office of Competition and Consumer Protection issued against other entities or court judgments.
- misleading. Santander Consumer Bank sent letters to selected existing customers with the information that they could take out a consumer loan on attractive terms. Only after examining the creditworthiness in the branch, it turned out that some consumers cannot incur liabilities on such terms. The President of the Office of Competition and Consumer Protection found that the bank was misleading consumers through its wording. This practice was abandoned by the bank, it said.

"The bank, by presenting information on the total amount of the loan, misled consumers as to the proportion between the total amount of the loan and its cost. Thus, its offer seems to the consumer more advantageous than it really is, and also better than the offers of other lenders who provide reliable information on the cost of the loan A client of Santander Consumer Bank, on the basis of misleading information, may - by comparing the bank's offer with those of other financial institutions - decide on a seemingly favorable loan, which he would not do if he had the correct information on the proportion between the cost and the total amount of the loan granted at Santander Consumer Bank," said Tomasz Chróstny, the President of UOKiK.

The President of UOKiK imposed a fine of PLN 44,212,688 on Santander Consumer Bank (PLN 38.2 million for including the premium for the additional insurance service in the total loan amount and PLN 5.9 million for misleading consumers).

The amount of the fine was influenced by the length of the practices - the bank used information about the terms of the loan, on which many consumers did not finally receive it, from January 2015 to September 2018, and the inclusion of insurance in the total amount of the loan - despite the fact that it was applied at least from 2016 r. has not been abandoned by the bank so far. The fact that the bank was aware that its practice differed from that of other market participants was also of great importance to the amount of the fine. For many years, the President of UOKiK has consistently indicated that the cost of an additional service should only be included in the total cost of the loan, which was also confirmed in court judgments. The President of UOKiK ordered that this practice be discontinued. The bank is also to inform consumers about the authority's decision.

The decision is not final and may be appealed against in court.

Source: UOKiK and ISBnews