WIBOR lawsuit – we demand the invalidation of the gold loan contract in court!
Dowlegal Law Firm has gained extensive experience in disputes with banks on the grounds of several hundred franking lawsuits taking the side of borrowers, defending their rights. We have been litigating since 2016 against all the banks that issued toxic loans between 2005 and 2010, and we publish all our achievements on the website dedicated to the subject of franking credits at: walkaofranka.pl and dowlegal.pl. Dowlegal Law Firm has won many rulings invalidating franking agreements for its clients.
What is WIBOR?
The Wibor is a benchmark index that is determined through a process known as fixing. For 25 years, the administrator was the Association of Financial Markets ACI Poland, while as of June 30, 2017, the administrator is the WSE Benchmark S.A.
Loan agreements usually provide for the use of WIBOR 3M or WIBOR 6M (where M stands for cycles of change in the reference rate, calculated in months).
According to the assumptions, based on the WIBOR interest rate, banks agreed to lend to each other, the important thing here being the way this ratio was determined – namely, it is the arithmetic average of the interest rates indicated by the banks after rejecting extreme values. In principle, it was or should be a reflection of the commercial banks’ interbank deposit transactions.
How does WIBOR affect the interest rate on a loan?
WIBOR (Warsaw Interbank Offered Rate) is a reference rate, used in Poland, set by the Association of Polish Banks (ZBP). The interest rate on a loan is set by the banks and depends on the WIBOR rate. WIBOR is the reference rate that determines the level of interest on a loan. Banks determine the contractual interest rate by adding a margin to the WIBOR rate, which depends on a number of factors, including the credibility of the borrower. The higher the WIBOR rate, the higher the loan interest rate will be. When the WIBOR rate is lowered, banks generally also lower the interest rate for the borrower.
Could a WIBOR lawsuit be the solution?
It depends on the situation. WIBOR can be a useful tool to access financing faster or minimize financing costs. In fact, it can be a good solution for some companies, as it provides the ability to access financing quickly and reduce the financial burden. However, it is worth remembering that a WIBOR lawsuit can be time-consuming, and in many cases, rescinding a WIBOR-based contract may not be a good solution (especially for new loan agreements). Therefore, it is important to carefully analyze your situation and determine whether a WIBOR lawsuit will be the best solution for you.
Will the gold-dollar holders end up like the francophone holders?
It is impossible to answer this question unequivocally. Everything depends on how the WIBOR lawsuits will be resolved. If the court finds them legitimate, banks that offered PLN loans may be forced to give back the installment amounts collected, based on an invalid contract. In the case of francophone borrowers, the lawsuits have been found to have merit, so the banks must usually return all the amounts collected. However, in the case of WIBOR lawsuits, the situation is different – primarily new and for borrowers, as well as for the courts, so it is impossible to say unequivocally how PLNers will end up.
Gold loans have drawbacks. Is there a chance to cancel the contract?
Depending on the situation you are in with regard to a particular PLN loan, there is a good chance that the contract can be invalidated. In order to achieve this, it must be shown that at the time the contract was concluded, the borrower was not properly informed by the bank about the real risk of an increase in WIBOR, as well as that the bank, to finance the loan, did not use money from the interbank market but deposits from other customers.
Challenging the WIBOR index in loan agreements – what are the possible courses of action?
Get legal help: before taking any action to challenge the WIBOR index, it is advisable to enlist the help of a professional lawyer who will be able to advise you on what steps to take.
Filing a lawsuit in court: if you believe that the WIBOR rate in your loan agreement is inappropriate, you can file a lawsuit in court.
Contacting the financial institution: if you want to avoid the court route, you can contact the financial institution that granted you the loan to negotiate a better WIBOR rate.
Enlist the help of consumer organizations: if you feel that your rights have been violated, you can enlist the help of consumer organizations that can help you fight for justice.
Take advantage of the financial regulators: if you want to take advantage of the financial regulators, you can file a complaint against the financial institution that granted you credit.
Why doesn’t WIBOR reflect reliable transactions?
Banks have always explained the necessity of including the WIBOR index in loan agreements by the fact that it is a reflection of the price of money that the bank needs to raise, to finance the borrower’s lending, however, our analysis has clearly shown that since 2009, deposit transactions between commercial banks have been very infrequent (sometimes 1-2 per month), so they do not provide a reliable reflection and give, at least hypothetically, room for manipulation of the index.
The answer to the question of why banks so rarely transact in the interbank market, with WIBOR included, is quite simple – banks finance lending actions (in simple terms) with deposits from their customers.
Why should WIBOR be eliminated from the contract?
If we assume that there are few transactions in the market, making the index, on which the mortgage (multi-year loan) is based, then the reliability of the index is unreliable and can lead to abuses in the financial market. Historically analyzing the practices of banks, we come to the conclusion that the use of a reference index in contracts, which was supposed to be reflected in transactions that are practically unquoted, only protects the interests of banks and at the same time exposes borrowers to unlimited risk. Therefore, we conclude that the WIBOR should be eliminated from the market, and if we assume that it is the element of the contract that is treated as the main benefit of the parties – it leads to the invalidity of the entire loan agreement.
What claims do borrowers have?
Cancellation of contract
Borrowers who have a PLN loan with a variable interest rate based on the WIBOR reference index are entitled to the most far-reaching claim for the court to declare that the WIBOR as an element of the contract, shaping the key rights and obligations of the parties, leads to the invalidity of the contract, but the specification of this claim in the lawsuit must be a conscious choice, for the situation of a borrower who took out a loan a dozen years ago and, in the event that the contract is declared invalid by the court, would be obliged to return only the nominal value of the principal to the bank (the effect of the declaration of invalidity of the contract) is different, and the situation of a borrower who signed a loan agreement a year or two ago is different.
Removal of the interest rate clause in general (WIBOR + MARGIN)
If the court finds in this variant of the ruling that the interest rate clause is illegal and grossly violates the interests of the consumer (the court will indicate the abusive nature of the clause), the court will find that the interest rate clause does not bind the consumer at all, or the consumer is not bound only by the WIBOR clause (with the maintenance of the margin), while the contract should be executed further in terms of the term of the loan.
Removal of WIBOR clause from the contract
If the court finds that the WIBOR reference rate was determined in a defective manner from the beginning, grossly violating the interests of the consumer, and does not render the entire agreement invalid, it is possible to perform this agreement on the assumption (during the same period as that originally assumed in the loan agreement) that the WIBOR clause from the agreement will be deleted and the loan will bear interest only on the bank’s fixed margin, which at the same time will cause the bank to account for any overpayments it received due to the application of the WIBOR clause.
Currently, our law firm
is handling cases against such banks as:
BPH
(denominated loan portfolio)
GE Money Bank
(currently BPH – indexed loans)
Raiffeisen
(Polbank's old mortgage portfolio)
Santander Consumer Bank
Mbank
PKO BP
Getin Bank
Deutsche Bank
Millennium
VIBOR WEIGHING HEAVY ON YOUR LIFE?
Swap WIBOR-based credit in gold loan contracts for a peaceful future!
Are you looking for help from an experienced law firm?
Learn the answers to the most frequently asked questions
What claims are available to a WIBOR borrower?
If the court finds the provisions of the loan agreement that base interest rates on the WIBOR index to be improper, the borrower has the right to pursue two basic claims. First, he can seek reimbursement of overpayments that were paid as a result of unjustifiably charging the loan an interest rate tied to WIBOR. These overpayments can amount to a significant sum. Secondly, the borrower can apply for a ruling that the WIBOR-related provisions do not bind him, meaning that he is not obliged to continue paying loan installments increased by this index. As a result of such a ruling, the loan changes its nature – from a variable-rate loan it becomes a fixed-rate loan, with the interest rate to be made based on the bank’s fixed margin indicated in the contract.
How long does it take to litigate WIBOR cases?
The duration of a case depends on a number of factors, but the average processing time from the filing of a lawsuit to a final judgment is about 3 years. This time may increase or decrease depending on the complexity of the case and the workload of the courts.
Where to file a WIBOR lawsuit?
The case can be brought to the court having jurisdiction over the borrower’s place of residence. This is the result of an amendment to the procedural law, according to which a bank can only be sued against the place of residence of the borrower. However, this has good consequences – the courts in Warsaw, where most banks have their headquarters, are very busy, so proceedings in Warsaw courts are very long. In smaller centers, we are able to obtain security in cases against banks in just a few days.
Can the court stop payments related to WIBOR?
Yes, it is possible to apply for collateral in the form of withholding loan installments based on WIBOR. Given the current level of WIBOR, such collateral can significantly reduce the amount of monthly loan installments. In recent months, there have already been the first rulings granting borrowers such collateral.
Does the borrower have to attend the hearing in person?
Usually, the borrower’s presence at the hearing is required, but increasingly courts are conducting hearings remotely, such as via online video conferencing. This saves time and money on commuting.
What are the costs of initiating a court case?
Litigation costs include a lawsuit fee (usually PLN 1,000), attorney’s fee (PLN 17), and an advance for expert fees (PLN 2,000-3,000). If the case is won, all these costs are reimbursed by the bank. The cost of the law firm’s fees is determined individually, depending on the contract. Our law firm offers attractive deals for representation in such cases – contact us for details!
Is it possible to sue the bank after the loan has been repaid?
Yes, the borrower has the right to pursue his claim even after the loan has been repaid. The fact that the loan has already been repaid does not exclude the possibility of making a claim for the return of overpayments resulting from an incorrect interest rate.
Can entrepreneurs sue the bank over WIBOR issues?
Yes, entrepreneurs can also assert their rights in WIBOR cases. In such cases, it is necessary to claim contractual imbalance and violation of the principles of social intercourse, which can lead to declaring the WIBOR provisions invalid. A detailed analysis of the loan agreement is important here. The risk of losing such a case is generally greater than in cases where the party to the loan agreement was an individual taking out a loan to purchase an apartment or build a house.
Is it worth waiting for systemic solutions or bank settlements?
In our opinion – no. The example of the francophiles shows that systemic solutions promised by politicians are often not forthcoming. Nor do banks offer favorable settlements. Instead of waiting for uncertain changes, it is better to act and assert your rights in court. Do it now, before the situation gets worse.
Is it worth suing the bank?
Yes, it is certainly worth it. The rulings issued so far on franking credits, including those on consumer rights protection, set a positive precedent for WIBOR credit cases as well. Take advantage of this opportunity and take action that can benefit you financially and change the terms of your loan to a more stable one.
What are the consequences of the invalidity of the WIBOR clause in the loan agreement?
The invalidity of the clause based on the WIBOR index means that the bank has no right to use this index to calculate the interest rate on the loan. As a result, the borrower can seek a reduction in the interest rate on the loan to a reference rate, such as the interest rate set by the National Bank of Poland or set based on other market parameters. In addition, the borrower can claim a refund of overpayments resulting from this unlawful interest rate.
Can borrowers claim compensation for loan overpayments?
Yes, borrowers can claim compensation for loan overpayments resulting from the unjustified application of an interest rate based on WIBOR. If the court finds the application of this index invalid, the borrower has the right to demand the return of the overpaid amounts, together with statutory interest for late payment from the date of payment of the overpayments.
Do banks have an obligation to inform borrowers of the WIBOR defect?
Banks are obliged to inform their customers of any changes to the terms of the contract that may affect the interest rate on the loan. However, in practice, customers have often not been sufficiently informed about the possible defectiveness of using WIBOR as an interest rate indicator. As a result, borrowers may have a claim for compensation for the lack of reliable information on this subject.
What to do if the bank refuses to refund overpayments?
If the bank refuses to refund overpayments resulting from the improper application of WIBOR, the borrower has the right to pursue his claim in court. In such a case, contact a lawyer who can help prepare and file a lawsuit against the bank. It is worth remembering that banks, despite their initial refusals, often lose lawsuits in WIBOR misapplication cases.
Is it possible to reach a settlement with the bank on a WIBOR loan?
Yes, borrowers can try to negotiate a settlement with the bank on a WIBOR-based loan, but such a solution is often difficult to achieve, and the terms of the settlements are not always favorable to borrowers. Banks usually do not offer settlements that are adequate to the real claims of borrowers. As a result, in many cases, it is more cost-effective to pursue claims through the courts. In addition, we note that, experientially, any settlement discussion with a bank without a professional attorney can lead to the inability to pursue claims under a loan agreement. On a number of occasions, we have been approached by franc borrowers who have signed a settlement agreement with the bank or an addendum, making it no longer possible to pursue claims under the CHF loan agreement.
What happens if the bank decides to settle the WIBOR loan?
If the bank agrees to a settlement, the borrower can expect a reduction in the amount to be repaid or a lower interest rate on the loan. However, it is worth exercising caution and carefully checking the terms of the settlement. In some cases, the terms may be less favorable than the outcome of litigation, so it is worth consulting a lawyer before deciding to sign a settlement.
What are the prospects for changes in WIBOR-based loans?
According to legal analyses and court positions, the current practice of using WIBOR as the basis for calculating loan interest rates may be considered illegal. In the future, systemic changes may be introduced to regulate this issue at the legislative level. Nevertheless, as experience shows, delays in the introduction of such solutions must be expected, so it is worth taking steps now to protect your interests.
Can borrowers count on changing loan terms to a fixed rate after WIBOR is eliminated?
Yes, if the court decides to eliminate WIBOR as the loan interest rate indicator, there is the possibility of changing the loan terms to a fixed interest rate based on the bank’s fixed margin. Essentially, the loan becomes a fixed-rate loan, which is beneficial to the borrower, especially when there are large fluctuations in WIBOR, which can lead to an increase in loan installments.
Do borrowers need to fear that banks will sue them for pursuing claims?
No, borrowers need not fear lawsuits from banks for pursuing claims related to WIBOR loans. The law gives them full authority to demand the return of overpayments or changes in the terms of the loan agreement. Banks, despite their initial fears, have no legal grounds to initiate proceedings against borrowers who assert their rights. Only in those cases where the court declares the loan agreement invalid and orders the bank to return any amounts taken, the bank may in the future ask the borrower only to return the principal paid, but this can only happen if the agreement is invalid.
What are the chances of winning a lawsuit against the bank?
From a jurisprudential perspective, the chances of winning WIBOR loan cases are high. Many rulings by courts, including the Supreme Courts and the Court of Justice of the European Union, point in favor of borrowers. In addition, Polish courts are increasingly sympathetic to arguments about the unfairness of contractual terms of WIBOR-based loans.
21. What documents will be needed to file a lawsuit against the bank?
In order to file a lawsuit against the bank, you will first of all need copies of the loan agreement and repayment schedule, as well as documentation confirming the payment of loan installments and the amount of overpayments. In addition, if you need to appoint an expert to calculate the overpayments, you may also need documents regarding the WIBOR for each loan period.
If you have any doubts or need detailed information about your case, we encourage you to contact our law firm. We will be happy to help you through the entire process of claiming WIBOR-based loans.
