- The LoanMe company granted loans, most often in the amount of several thousand zlotys. Signals received by the Office of Competition and Consumer Protection indicated irregularities in settlements in the event of early repayment of liabilities.
- Consumers also complained about the loan refinancing mechanism (so-called rollover) used by the company, which resulted in high non-interest loan costs and very high debt. The President of the Office issued a decision to impose over PLN 550,000 on LoanMe. PLN fine.
Faster repayment = refund
If the consumer has repaid the loan ahead of schedule, financial institutions must refund a proportionate part of the fees and commissions collected. This results from Art. 49 of the Consumer Credit Act. This interpretation of the provision was confirmed in September 2019 by the Court of Justice of the EU. LoanMe refused to refund consumers who had repaid the loan before the agreed date, if it was done before the CJEU judgment. Moreover, the entrepreneur – by refusing to allow borrowers to settle early loan repayment – misled consumers by informing that before September 2019, legal regulations did not impose on him the obligation to refund the loan costs. This could have influenced consumers' decisions to give up pursuing their claims.
– After the CJEU judgment, there are no doubts about how to interpret the provisions that apply to contracts concluded after the entry into force of the Consumer Credit Act, i.e. from December 18, 2011 – says the President of the Office of Competition and Consumer Protection, Tomasz Chróstny.
Loan rollover
Additionally, LoanMe engaged in the practice of alternately refinancing loans with another company, without the consumer's express request. A customer who had an active loan in LoanMe received another loan from the entity with which LoanMe cooperated. Then, the loan to repay the new liability was granted again by LoanMe. Non-interest costs were calculated separately for each refinanced loan. As a result, the consumer incurred very high (exceeding the limit specified in the regulations) non-interest loan costs and fell into the so-called debt spiral.
– If refinancing was carried out in accordance with the regulations, a consumer who did not repay the loan within 120 days and took out another loan from the same entity would be protected. All fees collected during this time must be within the limit of non-interest costs charged on the amount of the first loan – says Tomasz Chróstny.
The President of the Office imposed a fine on LoanMe of over PLN 550,000. PLN (PLN 557,047). The decision is not final and may be appealed against. LoanMe is currently on the Polish Financial Supervision Authority's public warning list.
