• In accordance with the Act on Consumer Loan, an early loan repayment equals a return of a portion of commission and some other fees.
• The President of UOKiK has issued a decision for Profi Credit Polska which obstructed or even prevented its customers from exercising this right.
• The company is to cease and desist the contested practices and pay a fine of almost PLN 10.4 million.

The Act on Consumer Loan clearly states that everyone who has taken a loan or a borrowing will have a right to repay the entirety or part of the liability before the deadline specified in the agreement - regardless of whether this involves an obligation towards a bank or a lending entity. Not only does the same Act order lenders to provide for an opportunity for an early repayment but also to reimburse a proportionate part of the fees and commissions charged.

Customers of Profi Credit Polska had a problem to execute their rights in this respect. As soon as the case was investigated into, the President of UOKiK concluded that by applying practices obstructing customers to repay the loan ahead of the schedule, the company violated collective interests of consumers.

– The activities of Profi Credit company are to the detriment on economic interests of consumers as they obstruct or even prevent them from exercising their statutory rights. An early loan repayment is a consumer’s right which results in the reduction of the cost of obtained financing, it should not be limited in any way by an entrepreneur – says Tomasz Chróstny, the President of UOKiK.

All or nothing

Profi Credit specified the rules for earlier repayment in such a way that a consumer wishing to repay the entire loan ahead of the schedule has to pay, on a one-off basis, the “entire repayment amount” referred to in the loan agreement, that is, with no consideration of a shorter lending period. On the other hand, partial early repayment is not possible at all. In the repayment model adopted by Profi Credit, a consumer may not exercise successfully their right granted to them under the Act on Consumer Loan. The overpaid amounts, in accordance with the provisions of agreement templates used by the company, are blocked until the instalment payment dates arising from the schedule. As a result of such a procedure, an instalment is reduced neither in its principal-related part nor in the interest-related one.

– The practices pursued by Profi Credit Polska may discourage consumers from making overpayments. The situation when the balance of consumer liabilities is not changed, despite the fact that when making higher payments they take up greater financial effort, is in conflict with the concept and purpose of an earlier repayment. At the same time, the company may freely dispose of the overpaid funds - until they are credited in accordance with the rule it has applied or the rule of the borrowing settlement. Thus, the customer’s ability to be relieved from debt is impaired. This is unacceptable – says the President of UOKiK.

In connection with the violation of collective interests of consumers, the President of the Authority ordered the company to discontinue the said practices and imposed a fine of almost PLN 10.4 million (PLN 10,399,882) on Profi Credit Polska. The details of the challenged practices are available in the decision. The decision is not final and can be appealed against.

Early repayment of a loan? Learn about your rights

• Anyone with a consumer loan can repay it early. The lender in such a case must proportionally reduce all the costs of the loan (e.g. fees, commissions, insurance costs) and reimburse them to a consumer.
• The reimbursable amount should be calculated using the straight-line method which consists in a division of all non-interest costs by a number of calendar days in which the agreement was to apply. The result is multiplied by the number of days by which the loan period was shortened. This amount should be reimbursed to a consumer.
• UOKiK has produced a credit calculator to help you calculate the estimated amount to be reimbursed based on the straight-line method.
• You may apply for a reimbursement of the unsettled part of the fees for a consumer credit or loan you have already repaid if you concluded the agreement after the entry into force of the Act on Consumer Loan, that is, after 18 December 2011. The limitation period for lodging a claim is 10 years for repayments made before 9 July 2018, and 6 years for repayments made after that date.
• If you want to claim back the money owed to you, file a complaint. You can use a ready-made form and send it to the financial institution that granted you the borrowing or consumer loan.
• For agreements concluded before 18 December 2022, there are limits on non-interest loan costs arising from the Act on Consumer Loan and they depend on the length of the loan term. Their maximum amount is 25% of the amount borrowed plus 30% for each year of the loan, but not more than 100% of the loan.
• Currently, after the amendment of the Anti-Usury Act, non-interest loan costs cannot be higher than 45% of the total loan amount.
• Check if the loan company or the credit broker is listed in a register maintained by the Polish Financial Supervision Authority (KNF).