Christmas Shopping Frenzy – Loans and Loans Promotion in Poland
Christmas is one of the few times of the year when consumers make unusually high above-average purchases. Many of them take out loans or loans at this time to bring joy to their loved ones. Advertising for both includes an additional duty to inform consumers.
Financial products are often advertised in superlatives such as: “cheapest”, “fastest” or – based on the rates: “0%”. The use of such terms in advertising is not prohibited, but their safe use depends on many factors. The President of the Office for Competition and Consumer Protection (OCCP) can view measures to mislead consumers or to fail to comply with the information obligations towards consumers as a violation of the collective interests of consumers.
For example, the OCCP notes that an advertisement on a loan that promises that the consumer will be granted a loan within 15 minutes without clarifying that the time is counted from the time the loan application is approved is an unfair market practice . If a company that offers a loan or loan, including an intermediary (broker), fails to disclose in an advertisement all of the costs associated with entering into a contract or discloses those costs in such a way that those costs are lower than they actually are, it may OCCP initiate legal proceedings against the company and impose a fine. The amount of the contractual penalty depends, among other things, on the severity of the violation and can amount to up to 10% of the entrepreneur’s turnover in the year before the decision is issued.
Need to have in promoting credit and loans
The Consumer Credit Act applies to both credit and credit. It requires the creditor or lender On an ad, provide information about the cost of borrowing in a. at clear, understandable and visible. It is mandatory to provide information about:
- the interest rate on the loan including information about whether the rate is fixed, variable, or both;
- Total loan amount;
- the APR (APR).
If necessary, the consumer must also be informed about: the duration of the agreement, the total amount to be paid by the consumer and the amount of the individual installments, the price of the goods or service and the amount of all advance payments – if a credit agreement provides for a deferment of payment.
Information about the total cost of the credit / credit must be given to the consumer as a representative example at least as conspicuous, legible and audible as information about the cost of the consumer credit.
A large amount of mandatory information can make it difficult to include in an audio-visual or radio commercial, for example. In the case of graphic advertising, for example in the press or on billboards, it should be easier, but here, too, certain problems can arise. Even if they are technically feasible, their visibility or legibility can be problematic, and in radio advertising, if the text is read out very quickly by a speaker, problems can arise with the comprehensibility and perception of the information by the consumer. The assessment of whether the collective interests of consumers have been violated is a case-by-case examination and often involves going through “gray levels”.
Contrary to regulations on labeling and packaging of tobacco products, Polish regulations do not provide for a minimum area (or time – in the case of radio advertising) that must be filled with information about the actual cost of the loan compared to the total advertising space in order to objectively meet the “information”. Requirement. Information about the actual cost of financial products is usually placed in lower case at the bottom or at the side of the graphic. The assessment of whether the collective interests of consumers have not been violated and the information has been made clear, understandable and visible is subject to each case individual evaluation.
If the information provided to consumers in advertisements is not in accordance with the law, the company offering a loan or credit may be accused of violating the collective interests of consumers or of engaging in unfair market practices. Hence it is necessary pay a fine and in some cases to reimburse consumers wrongly charged interest.