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Case detail

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Directive article Article 5 2.
National ID Decision no. RWR 32/2010
Country Poland Decision date 20/12/2010
Common name Decision type Administrative decision, first degree
Court Prezes Urzędu Ochrony Konkurencji i Konsumentów, Delegatura we Wrocławiu Plaintiff(s) Prezes Urzędu Ochrony Konkurencji i Konsumentów
Court translation The President of the Office of Competition and Consumer Protection, Delegature in Warsaw Defendant(s) WEH Inwestycje sp. z o.o. with its registered office in Wrocław
Subject intimidation
Keywords intimidationcoercionfalse impression

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Headnote

 

It is an unfair commercial practice to send letters to consumers threatening them with bankruptcy procedures and executive proceedings on their assets, when in fact such procedures are not (or not easily) available.

Facts

The defendant conducts a business activity consisting of buying receivables from creditors (such as banks) that were ineffective in recovering them, and then seeking the recovery of those debts with the defendant itself. In the process of recovery, the defendant used a uniform letter towards the consumers by which the defendant informed the consumer about the consequences of non-payment after receiving such letter. 

In particular, the letter suggested that the defendant would file a motion to declare bankruptcy of the consumers, although in accordance with Polish law, the defendant cannot file such a motion. Moreover, the letter stated that the defendant would start executive proceedings by assessing the value of the consumers’ assets although such proceedings are available only when a court’s judgment is obtained. It was further stated that the defendant would pass on information of the consumers’ debts to the registry of debtors. 

Legal issue

Is it an unfair commercial practice to send letters to consumers threatening them with bankruptcy procedures and executive proceedings on their assets, when in fact such procedures are not (or not easily) available?

Decision

According to the President, the letters were clearly written with the purpose of exerting pressure on the consumers against whom debt recovery proceedings were conducted.

It was held that the information included in the letter was not easily understandable, nor assessable for an average consumer. The defendant used the consumers' inexperience and fear to convince them to behave in the manner envisaged by the defendant, i.e. to repay the debt. 
 
Such commercial practice of the defendant can lead to a situation in which the consumers are deprived of the possibility to make an autonomous and reasonable decision with regard to the payment of the debt in situations in which the consumer is under pressure. In this event, it is conceivable that consumers repay a debt that does not exist, or which cannot be recovered due to a lapse of limitation period. 
 
Therefore, the consumers could make payments under pressure which would not have been made if those consumers had not been under pressure of the defendant. The President ruled that the defendant’s practice as described above violated art. 4 sec. 1 of the Unfair Commercial Practices Act and art. 24 sec. 3 of the Competition and Consumer Protection Act.

  URL Decision Decision full text
EN N/A
PL http://decyzje.uokik.gov.pl/dec_prez.nsf/0/FF5FCF298A404761C12578250050BE37/$file/Decyzja%20nr%20RWR%2032-2010%20z%20dnia%2020.12.2010r..pdf

Result

The practice was found to constitute an unfair commercial practice.

 
The President imposed on the defendant a financial penalty, paid to the state budget, in the amount of PLN 70,096. 

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