list of contributors - GALA

2. Issue: Misleading advertising
The Parties: Polska Izba Finansowa „Skarbiec” Sp. z o.o. v. the Chairman of the Office for
Competition and Consumer Protection (OCCP)
Where: The Court for the Competition and Consumer Protection
When: 23rd June 2004
The facts of the
case & the
settlement::
The limited liability company Polska Izba Finansowa „Skarbiec” diffused a
press advertisement, offering consumers credit or cash loans on preferential
terms.
As a result of a complaint, proceedings were initiated in the Office for
Competition and Consumer Protection (OCCP). The Chairman of the OCCP
rendered a decision stating that the abovementioned activity constituted a
practice infringing collective interests of consumers within the meaning of
Article 23a, Section 1, Act 15 of the December 2000 – Law on Competition
and Consumer Protection (text consolidated in Journal of Laws of 2003, No
86, Item 804). The decision prohibited further release of advertisements of
this kind.
In the justification of the decision the Chairman of the Office declared that
the company P.I.F „Skarbiec” did not conduct an activity consisting in
granting of credits. The services offered by the company consisted in
participation in capital consortium having a self-financing character,
gathering funds from periodical payments of the participants. Thus, the
Chairman of the OCCP stated, that the company’s advertisement was
misleading within the meaning of the Law on Combating Unfair
Competition. The second condition, i.e. infringement of collective consumer
interests, was also fulfilled.
The company P.I.F „Skarbiec” appealed the decision to the Court of the
Competition and Consumer Protection. In the appeal the company raised,
that the advertisement did not suggest, that the company offered granting of
the credits. The advertisement was only informing about the company’s
assistance offered to the clients in obtaining bank credits. The Court found
the appeal groundless and upheld the challenged decision. The Court
assumed that it was clear from the advertisement, that the company P.I.F
„Skarbiec” grants credits. Moreover, it results from the advertisement that
the credits were granted on preferential terms and according to a simplified
procedure. Finally, the Court ruled, that pursuant to Article 5 of Banking
Law, granting credits, with the exception of consumer credits, should be
exclusively performed by business entities operating as banks. The Act lays
down the principle that banks shall operate exclusively as State-owned
banks, cooperatives or joint-stock companies. The company P.I.F „Skarbiec”
operates as a limited liability company and even its object of activity does not
cover granting of credits. It therefore constituted yet another ground for
considering the advertisement as unlawful, which could induce a false
assumption that the company had a financial standing equal to banks and
that the consequences of entering into an agreement with the company
would be equal to those of entering into agreements with banks.
Comments: The advertisement diffused by the company P.I.F „Skarbiec” constitutes a
classic example of business activities operating within the so-called
“Argentinean system”. Advertisements of such entities are - as a matter of
principle – misleading, since they suggest a relation to a banking institution
granting credits on usual terms. Pursuant to binding provisions of the Polish
law, the conduct of operations within the Argentinean system is prohibited.