On December 18, 2011, the new Consumer Credit Act of May 12, 2011 entered into force (Journal of Laws No. 126, item 715), replacing the previous one with the same title from 2001. If you plan to incur in the near future loan or credit, it is worth familiarizing with the solutions introduced by this act, because it grants the consumer a number of rights, and imposes many duties on lenders and loan intermediaries. This knowledge will help you understand your rights and obligations as a borrower.
Who is a consumer and who is an entrepreneur?
The Act refers to the definition of consumer and entrepreneur, which are included in the Civil Code.
According to art. 22¹ kc consumer is a natural person who performs a legal act not related directly to its business or professional activity. Therefore, if a natural person does not conduct business or professional activity, he will always be considered a consumer when concluding a contract with an entrepreneur. If he carries out a business or professional activity, then the consumer will be considered when the legal act which he performs (eg he concludes a loan agreement) is not directly related to this activity.
And who is the entrepreneur according to the Civil Code?
Its definition is found in art. 43¹ kc According to it, the entrepreneur is a natural person, legal entity and other organizational unit, which is not a legal entity but by law may have rights and obligations under civil law (these are so-called “defective legal entities”, an example of these are, for example, commercial partnerships), which carries out business or professional activities on its own behalf. As you can see the definition of the entrepreneur is more roomy than the consumer. When running a business or professional as a natural person, you can have a double personality like Dr Jekyll and Mr Hyde. ? Depending on the circumstances, you will be considered a consumer or entrepreneur.
Remember that the Consumer Credit Act applies to two types of entrepreneurs. Down:
- lenders who give or give a promise to grant a loan and
- credit intermediaries who, without being a creditor, obtain financial benefits (for example in the form of remuneration from the consumer), for activities related to the preparation, offering or conclusion of a credit agreement.
What is consumer credit?
Is the consumer loan all credit granted to the consumer by the lender with the possible participation of the credit intermediary? The answer to this question is NO.
According to art. 3 par. 1 of the aforementioned act, the consumer credit agreement is understood as a credit agreement in the amount not exceeding PLN 255 550 or the equivalent in another currency, which the lender provides or promises to provide to the consumer in the scope of his activity. The average exchange rate announced by the National Bank of Poland on the last day of the quarter preceding the day of conclusion of the contract is used to convert the equivalent of such a loan into another currency.
It is worth mentioning that the previously applicable Act of 2001 was applicable to loans in the amount not exceeding PLN 80,000. PLN or its equivalent in other currencies.
Why is the amount of PLN 255 550 currently accepted as the above threshold, which credit will not be considered a consumer?
Because it is the equivalent of 75,000 euro converted at the exchange rate on the day of adoption of Directive 2008/48 / EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers. The purpose of this directive is to harmonize legal provisions regulating the granting of consumer loans in the EU Member States. The Act on consumer credit implements the above directive to Polish law.
What is very important, for the consumer credit the Act considers credit in the economic sense, ie the granting by the lender of any financial assistance to the consumer, and not only in the form of a loan agreement with the bank based on the provisions of the Banking Law. Thus, a consumer loan, in addition to a bank loan, will also be a loan agreement, a contract for postponing the repayment date of monetary amounts (if the consumer is obliged to pay costs related to deferment) or a renewable credit agreement. The Act also applies to consumer credit agreements, which the cooperative savings and credit union (SKOK) grants to its member. Such regulation means that the Act on consumer credit is required to comply not only with banks, but also with Credit unions, credit unions and so-called parabanki.
Contracts to which the Act does not apply.
However, the Act excludes certain types of contracts from the category of consumer credit, even though the consumer obtains financial assistance on their basis. It’s just that it’s almost like that, there are rules and exceptions to these rules. ? And yes, the Consumer Credit Act does not apply to:
- contracts in which the consumer is not obliged to pay interest and bear other credit costs ; they are so-called free credits in which the consumer is only obliged to repay the borrowed capital;
- leasing contracts, if such agreement does not provide for the obligation to transfer ownership of the subject of the contract to the consumer;
- loan agreements for the purchase of financial instruments concluded with foreign investment firms and investment firms conducting brokerage activities on the territory of Poland (ie with brokerage houses and banks conducting brokerage activities);
- credit agreements resulting from court settlements, settlements concluded before the arbitration court, or as a result of mediation proceedings;
- credit agreements granted only to employees employed by a given employer if the employee is not obliged to pay interest or is required to pay an interest rate lower than that commonly used on the market; in practice, this exemption applies to the so-called employee loans granted from the company’s social benefits fund;
- credit agreements granted under special regulations using lower interest rates than market rates or if the consumer is not obliged to pay interest. This exclusion applies, for example, to student loan agreements, regulated in the Act on loans and student loans.
With regard to leasing and rental agreements, the act applies to them if the borrower has the right to demand the transfer of ownership of the subject of these contracts to the consumer. The condition is that this right should result from a separate contract than the leasing or rental agreement.
Agreements to which only certain provisions of the Act apply.
In addition, the Act also specifies certain types of credit agreements with the participation of the consumer, to which only some of its provisions apply. Such contracts are, among others:
- credit agreements or loans secured by a mortgage ;
- credit agreements in the consumer savings and settlement account ;
- contracts providing for the deferment of payment or a change in the method of loan repayment if the consumer is in default of repayment if the provisions of this contract are not less favorable to the consumer than the credit agreement from which the indebtedness resulted directly.
The Act on consumer credit in art. 4 par. 2, which contains a list of the abovementioned contracts specifies which selected regulations apply to them.
Why is it worth knowing what consumer credit is?
Because, as you can see, the Consumer Credit Act is applicable to a wide range of credit or loan products that are offered to individuals on the financial market. Protecting the interests of the consumer, the Act grants him many powers, which correspond to the numerous obligations of creditors and credit intermediaries. Some of them should already be completed at the stage of advertising the loan, the next before the conclusion of the contract and subsequently at the stage of its conclusion, servicing and repayment of the loan. You will learn about them in detail from two subsequent entries, to which I strongly encourage you to read?