The Polish Office of Competition of Consumer Protection established as part of ongoing proceedings against Idea Bank SA said that the lender misled clients when offering them bonds issued by debt collector GetBack SA, which is undergoing restructuring proceedings.
Several thousand retail investors had acquired GetBack bonds prior to the company's collapse in April 2018, with Idea being one of the main distributors of the bonds.
The competition regulator said Idea misinformed retail clients by saying that GetBack bonds would offer them a guaranteed annual return on investment and that they were subject to the supervision of the Polish Financial Supervision Authority and were as safe as bank deposits or treasury bonds.
The competition regulator said in its Aug. 1 announcement that its decision, which can still be appealed by Idea, could help clients to pursue their claims against the bank in courts.
The administrative proceedings against the lender, launched in October 2018, are still ongoing, and the regulator is now analyzing available evidence to determine if the bank was involved in misselling practices by offering GetBack bonds to clients who had different investment needs.
If the misselling allegations are confirmed, the regulator could impose a fine on the bank of up to 10% of its turnover and oblige it to remedy the adverse effects of misselling practices.