Santander Consumer Bank hit with 44 million pln fine by UOKiK

The President of the Office of Competition and Consumer Protection issued a decision in which he found that Santander Consumer Bank infringes the collective interests of customers. Two practices raised doubts. UOKiK imposed a fine of PLN 44 million on the bank, the decision is not final.

The first questioned practice is to include the premium for the additional insurance service in the total amount of the loan. A consumer who takes a consumer loan with insurance in the SCB may credit its cost. The bank, however, illegally includes the cost of insurance premiums in the total loan amount, the Office of Competition and Consumer Protection found. Pursuant to Art. 5 points 6 and 7 of the Consumer Credit Act, the bank should include the premium for the additional insurance service only as the cost of the loan, such as, for example, a commission. Otherwise, the total cost of the loan seems smaller and more attractive, and the amount paid to the client – higher. This is not true because there is an insurance premium (additional cost) to pay and the loan amount is actually lower by the amount of the premium. The questioned practice continues despite the UOKiK’s decisions against other entities or court judgments.

“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. In this way, 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 about the cost of the loan. A customer 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 correct information about the proportion between the cost and the total amount of the loan granted in Santander Consumer Bank” – says Tomasz Chróstny, President of the Office of Competition and Consumer Protection.

The bank’s activity violated the economic interests of consumers, who – not being able to reliably compare the offer with the offer of other banks, which correctly informed about the total amount of the loan – could choose an offer that was less favorable in terms of the costs they would have to incur. On the other hand, it affected the fairness of competition between financial institutions – the seemingly attractive offer of SCB fared better in comparison with the offers of other banks.

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