The Polish competition authority (“UOKiK”) has begun a preliminary investigation into the rules for assessing consumer creditworthiness and their potential impact on lending conditions.

Credit Information Bureau S.A. is a Polish company that develops and implements scoring models for assessing credit and fraud risk, operating in accordance with the Polish Banking Law.

UOKiK emphasized in its press release that the creditworthiness assessment considers the frequency and number of credit inquiries, but consumers have no information on when the scoring model stops taking account of previous inquiries when calculating a borrower’s credit score.

UOKiK is looking into whether such a scoring model might constitute a competition-restricting practice.

The suspicion is that the model may discriminate against customers who explore and compare several banks’ financial product offers to choose the one that’s best for them. In other words, UOKiK worries that the creditworthiness assessment could discourage consumers from comparing different offers - whether for consumer or mortgage loans.

Besides, UOKiK is poised to analyse whether the system involves an anti-competitive exchange of information.

Information exchange

Information exchange is a common feature of many competitive markets. It can generate various types of efficiency gains and help solve problems of information asymmetry. However, exchanging competitively sensitive information can restrict competition if it enables undertakings to become aware of their competitors’ market strategies.

On the other hand, sharing information can enable retail credit markets to function effectively. In principle, banks may need to share data on borrowers’ creditworthiness to prevent fraud and keep the financial system safe.

UOKiK attempt at the Asnef-Equifax case

Credit score bureaus have been investigated before by competition law authorities.

In the Asnef-Equifax case (C‑238/05), the Court of Justice for the European Union concluded that the information exchanged on creditworthiness reduced lending risk by narrowing the gap between the information available to credit institutions and that held by potential customers. In this way, the court found, the information exchange improved the functioning of the retail credit market, and did not restrict or distort competition.

If you need more information or further guidance in this area, please contact Marcin Alberski and Stanislaw Szymanek.

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