Borrowers have perked up. Another wave of lawsuits against banks on the horizon?

“Puls Biznesu” reports on the growing number of lawsuits against banks. There are about 10,000 cases pending in courts concerning sanctions for bank loans (SKD), which are linked to consumer loans (not mortgage loans!).

What is a free credit sanction?

The sanction of free credit is regulated in art. 45 of the Consumer Credit Act. According to this provision, a violation of the provisions listed in the Act results in the consumer returning the credit without interest and other credit costs established in the agreement. The condition for using the sanction of free credit is to submit a declaration to the bank.

The Consumer Credit Act clearly lists the provisions the violation of which enables the use of free credit sanctions.

First of all, these may include the following violations:

• crediting commissions,

• indicating the wrong maximum amount of non-interest loan costs,

• incorrect indication of the total loan amount,

• the agreement does not specify the date and method of loan repayment,

• incorrect description of the loan interest rate, the conditions for applying this rate and the procedure for changing it,

• providing incorrect APR,

• providing an incorrect total amount to be paid,

• failure to provide information on other credit costs (e.g. commissions, margins, costs of additional services, in particular insurance) and the conditions for their change,

• limiting the consumer’s possibility of withdrawing from the contract to submitting a declaration in writing,

• description of the incomplete procedure for repayment of the loan before the due date, as well as the settlement of commissions.

18 million consumer loans

The Polish Bank Association assessed that the “popularity” of lawsuits is due to compensation companies which, in exchange for a commission on winning claims, guide clients through the entire court process.

What numbers are we talking about? For comparison: there are over 170,000 disputes in Swiss franc cases, and only about 10,000 lawsuits have been filed regarding SKD. The disproportion is therefore huge, but there is still a lot of room for improvement: there are about 18 million active consumer loans, and debtors are eager to check whether there are circumstances in their case that would allow them to “win” something in this matter. As recently as 2021, there were no more than 200 SKD lawsuits filed in courts per year.