The whole truth about bank commissions. What is behind high fees?

The topic of repayment of a loan limited only to borrowed capital arouses great interest. The center of his attention includes the latest judgments of the Court of Justice of the European Union (CJEU), national case -law, premises for applying the free loan sanctions and the principles of its settlement. Meanwhile, as experts indicate, the source of the problem is much deeper. Its basis are opaque mechanisms and excessive commissions, both elements designed, as you can easily guess, for the benefit of banks.

Bank commissions – the case of Mr. Paweł

I heard about the case of Mr. Paweł from Helpfind. Nine years ago, he took a loan at the bank for 120 thousand. zloty. He was spread over 144 installments, i.e. for 12 years. A few years later, after analyzing the loan agreement, it turned out that a commission for granting a loan of 44,000 was also credited. zloty. In addition, from the commission, the bank also charges interest, which in total amount to 30,000. zloty. The customer was not aware that in addition to interest on capital, additional costs of over 70 thousand would be charged. zloty. According to company representatives, the commission in this case was almost 60 percent. the amount obtained. As it turns out, the case of Mr. Paweł is nothing special.

– Only a dozen or so years ago, banks’ commission from loans in Poland looked different. The client usually received clear information on how much it is, that it can be repaid in advance or spread out in installments and what it results from: and this is a fee, which is worth emphasizing, for sales activities, verification of credit scoring or processing the application-notes Piotr Siekański from the LndTech Foundation in an interview with “Wprost”, for several years investigating the financial and insurance industry.

He emphasizes that these are relatively simple activities, and the bank earns interest on credit anyway.

– The size of the commission has grown today, how much ambiguity and controversy around it is at least very doubtful – he says and reminds that the issue of commission is still the entire area of ​​errors in credit agreements.

These are usually errors arising, among others from the lender failure to comply with the customer’s obligation, related to the provision of the APRC, the total loan amount, the conditions of prior loan repayment or other important information, on the basis of which the potential borrower should be able to make an informed decision to make a liability.

(Not) moral bank commission

My interlocutor points out that the credit commission is in fact a form of remuneration for the sale of a financial product. In recent years, banks are increasingly retreating from maintaining their own branches and sales structures, transferring this area to external credit intermediaries. In turn, they focus their offer almost exclusively on credit products, and the commission has become the basic tool for their remuneration.

– This results in a constant scale of this fee, from which the banks have made an instrument to stimulate sales – says Siekański.

As he notes, banks are institutions of public trust, and thus, should be controlled by this process.

– Meanwhile, more and more often you get the impression that “bad money displaces a good” – commissions reach extreme levels, and almost every cash or consumer loan is charged with maximum non -interest costs. This state of affairs is increasingly adopting the size of a serious dysfunction of the credit system in Poland – he adds.

“Salary on remuneration”, i.e. interest on commission

According to my next interlocutor, the construction of bank commissions resembles remuneration from … remuneration.

– Banks commit various activities that can be called differently than manipulations and hindering the client’s assessment of loan conditions, including its total amount. However, apart from this, in the background is the subject of the commission, which can reach the amount of more than half of the amount borrowed from the bank and that interest is charged from it throughout the entire duration of the loan agreement. It is nothing more than a hidden salary of remuneration that the bank admits himself – says legal advisor Stanisław Stawiński.

New bank tactics

There is more and more fears on the market that the practice of lending commissions will eventually be successfully undermined by the courts. This may happen as a result of subsequent judgments of the Court of Justice of the European Union and national courts, which are already considering several thousand cases regarding the sanctions of the free loan. The recording case -law can lead to a script in which banks will lose all interest due on the customer.

In response – as legal advisor Stanisław Stawiński notes – banks began to offer clients changes to the terms of the contract, replacing the existing credit constructions with new ones – without commission. These activities are to reduce the risk of lawsuits and the use of a sanction mechanism, but they are also a positive effect of increased interest in consumer protection and the institution of free credit sanctions itself.

It is worth paying attention to existing solutions in other sectors – for example, on the insurance market, changes resulting from the EU IDD directive limited the possibility of paying high commissions in advance, introducing tranche settlements and the obligation to return them in the event of the customer’s resignation. Meanwhile – as Piotr Siekański notes – there are no similar, rigid statutory limits in credit products.

– You can see the gap in the rules. All fees and commissions in relation to e.g. loan institutions, commonly known as payday loans, are written and strictly limited. In turn, banks, SKOK-I and institutions providing bank loans do not have rigid, statutory limits for imposing commissions on their services. This asymmetry should be surprising, given the privileged position of banks in the legal system and their actual market position in Poland – says Piotr Siekański.