On July 7, 2025, a draft of a new Consumer Credit Act (the “Draft”) was published on the Government Legislation Center website, aimed at implementing EU directives. The draft introduces significant changes to current regulations, including those related to so-called free credit sanctions. This sanction, in force in Poland since 2002, requires the consumer, after submitting an appropriate declaration, to repay only the principal, without interest or other costs. This is a more favorable solution than the complete invalidation of the contract, which, in practice, might not be profitable for the consumer. Currently, the free loan sanction is used when a lender breaks regulations related to, among other things, the agreement’s form, its content, disclosure requirements, or loan cost limits. The draft keeps this mechanism but expands it into a new, more comprehensive form.

Proposed Changes in the Draft

The most far-reaching sanction – no requirement to repay the principal

ZPursuant to Article 66, Section 1 of the Draft, if the lender grants a loan:

• despite the lack of a consumer request,
• without the consumer’s express and unambiguous consent to conclude a credit agreement or an additional agreement,
• or based on presumed consent (e.g., silence, lack of reaction, default action),

the consumer is not obliged to return either interest, other costs, or even capital.

Moreover, the lack of obligation to repay the principal also applies to situations where there were breaches when concluding the additional contract itself (e.g., insurance), and not only the main contract.

Importantly, this sanction will be applied ex lege, i.e., without the need for the consumer to submit any declaration, as is the case, for example, under the current legal status.

Classic sanction – no interest and costs

W przypadIn the case of other serious violations (Article 66, Section 3 of the Draft), such as:

• no creditworthiness assessment,
• failure to preserve the form of a durable storage medium
• violation of information requirements,
• exceeding the maximum non-interest loan costs,

After submitting an appropriate declaration, the consumer repays only the principal, without interest or additional costs. This solution corresponds to the sanction of free credit provided for in current regulations.

A milder sanction – half of the contractual interest

ProjThe draft also provides for an alternative, less severe sanction for the lender (Article 66, Section 4): the consumer returns the principal, together with half of the contractual interest, without incurring any additional costs.

It applies to breaches of “less important” obligations, such as:

• failure to specify the loan type or contract duration
• lack of accurate information about interest rate changes
• failure to provide information about the change in interest rates on a durable medium.

Doubts may arise about whether the sanction will cover half of all contractual interest or only the portion related to the change in its amount – and whether it will cover both the increase and the decrease of interest rates. However, it seems that the regulations imply a more severe version.

Powers of the Court

Article 66, Section 5, allows courts to intervene in the legal relationship between parties in a consumer credit agreement if the creditor does not acknowledge the consumer’s declaration regarding a half-interest penalty. The court can then modify the legal relationship to ensure that the total cost of the loan does not exceed the original total, considering the severity of the breach and the interests of the parties. This provision benefits the consumer exclusively. It enables the imposition of a more severe sanction than the one imposed under Article 66, Section 4 of the Draft.

Deadlines for applying sanctions

As is currently the case, the consumer may also invoke the sanction after the contract has been executed, no later than one year from the date of repayment of the total amount due.

Legislator’s paternalism and the coherence of civil law

The Draft’s provisions align with a broader trend of enhancing consumer protection, but this comes at the cost of party autonomy and the coherence of civil law. Several issues are evident:

• Inconsistency with the Civil Code – the contract remains valid, but the law imposes sanctions that effectively negate the creditor’s claims. This results in the formation of imperfect obligations.
• “Free provision” – the absence of an obligation to repay the principal means that the consumer benefits at the creditor’s expense, which can hardly be regarded as a proportionate and morally justified solution.
• Extending sanctions—even mistakes when finalizing an additional agreement—lead to sanctions against the main agreement, raising questions about proportionality.
• Vague concepts – requiring “explicit and unambiguous” consent leaves significant room for disagreement.
• Duplication of regulations – the prohibition of pre-selected checkboxes is included in two provisions (Article 46, Sections 3 and 5), which reduces the transparency of the act and may lead to interpretation difficulties.

The legislator’s intentions are clear – consumer loans are essentially adhesion contracts, where creditors dominate the contracting process. The aim is to enforce the desired organization of the contracting process, which is to align with regulations. Instead of using the sanction of “gratuitous provision,” a similar effect could be achieved by regulating a specific form of consumer declaration, with a more lenient sanction if not followed.

Effects of regulation

• For creditors, increased contractual risk, which will be reflected in higher bid costs or reduced credit availability.
• For consumers, broader protection, but paradoxically, the possibility of more difficult access to credit.
• For the legal system, deepening the disintegration of civil law by introducing further extracode sanctions.
• For court practice – a significant rise in the number of potential interpretation disputes due to vague and ambiguous provisions.

Summary

The draft law expands the scope of sanctions for free credit and introduces a gradation of sanctions, which, in theory, is intended to increase the system’s proportionality. However, in practice, it raises numerous concerns, ranging from the risk of unjust enrichment of the consumer to inconsistencies with the Civil Code.

While the legislator’s goal—to strengthen the consumer’s position—is understandable, the measures employed may be excessive and ultimately lead to unwanted market and ethical consequences. It would be more consistent and fairer to restrict sanctions to interest and costs, while still requiring repayment of the principal.

Jabłoński Koźmiński & Partners team is available to provide regulatory advice, prepare legal opinions, and represent clients’ interests in proceedings concerning free credit sanctions and all other consumer protection issues. Don’t hesitate to get in touch with us – together we will develop solutions that protect your interests in a rapidly changing legal environment.