Clauses prohibited by law (also called abusive clauses) usually appear in contracts offered to mass customers. A prohibited clause is one that the consumer has no real influence over and which puts the consumer in a legal disadvantage vis-à-vis the entrepreneur and is unfair. Prohibited clauses appear on almost every level of services offered by professional entities (banks, insurers, developers, energy and telecommunications forms). They appear in many contracts presented to consumers.
The most media and most advertised clauses are provisions of mortgage loan agreements concluded in the Polish currency and indexed to a foreign currency. These agreements are commonly referred to as “franc agreements”, as most of these agreements are related to the adjustment of the loan amount to the CHF currency.
Where are the prohibited clauses?
What, then, are prohibited clauses in franc loan agreements? These are primarily clauses that make the amount of debt (loan capital and interest) dependent on the bank’s exchange rate. These clauses appear in particular in so-called the old portfolio, i.e. loan agreements concluded in 2006-2009. Their dishonest nature consists in the fact that the amount of the loan capital paid in zlotys, for the purposes of repayment, is converted into the CHF currency at the currency purchase / sale rate in force in the bank granting the loan on the date of payment of the loan amount (or its individual tranches).
This exchange rate is usually much higher than the average exchange rate of the National Bank of Poland, and most importantly it is the exchange rate determined by the bank’s internal regulations, which the borrower has no influence on. Thus, “playing the currency” the bank indirectly increases the borrower’s debt. A similar mechanism is used in the case of repayment of individual principal and interest installments. In this case, the bank collects the installment in PLN from the borrower, but the amount is expressed in CHF. The amount of a given installment in a given month is therefore additionally dependent on the PLN / CHF exchange rate in force in a given bank – usually the exchange rate from the day the installment is due is payable.
In defense of the consumer
The banks’ application of the above practices was met with massive reactions from consumers and legal protection authorities (Office of Competition and Consumer Protection, Financial Ombudsman).