AFTER Michael Müller left the board director position at Raiffeisen Bank (RBA) a few months ago because of the intention of undue pressure on the court and justice system, Raiffeisen group is involved in a new, even bigger affair, Index Istrage (Index Investigations) discovered.

While Croatia was being struck by the worst and the long-lasting recession in its recent history, while people were losing jobs and homes, RBA Leasing decided to dig even deeper and illegally into its clients' pockets.

They don't want to return money to their clients, although it was found that the money was illegally taken 

National supervisory authorities established irrefutably that Raiffeisen Leasing, contrary to the signed leasing contract, had been increasing the repayment installments for leasing users from 2008 to 2013. The leasing users paid a much bigger amount of interest rates than they actually owed. After the Croatian Financial Services Supervisory Agency determined illegalities and irregularities, RBA Leasing didn't want to return the money to the injured parties because they stated that the limitation period came into effect. There are more than 15,000 contracts in question, 15,684 contracts, to be more exact, which means tens of thousands of kunas which RBA Leasing unlawfully took from its clients, and interest rates should have increased that amount until today.

Hanfa stated that they are aware of the situation and announced to Index the supplementary supervision of RBA Leasing operations. Index learned that DORH (State's Attorney Office of the Republic of Croatia) and USKOK (Bureau for Combating Corruption and Organized Crime) are also informed about the situation. We've asked for lawyer Srdjan Kalebot's opinion about the case in question, who, given the irregularities found in RBA Leasing operations, advised the injured parties to file an application for reimbursement towards Leasing and to contact Hanfa. But, first things first.

Supervision: They were paying the larger amount of interest rates that they actually owed

Hanfa's supervision determined that since 31 October 2008 until 28 March 2013, RBA Leasing had been unjustifiably and unilaterally changing the fixed part of the interest rate (margin) in active leasing contracts, without a clear specification in contract terms, or without justified reasons, and hadn't informed the lessees of that amendment, although it was expressly prescribed.

"Based on a unilateral determination of interest rates, the Company charged leasing installments based on the interest rate, i.e., the margin which was larger than was initially agreed, and which resulted in leasing users paying a larger amount of interest over the duration of the contract than they actually owed. In addition to that, by failing to inform the leasing users about the interest rate amendments, the Company acted contrary to the general conditions of the leasing contract and provisions of the relevant regulations, according to which was prescribed the leasing client's right to be informed about any amendments in connection to the real annual interest rate, i.e., the total fee that had to be paid," Hanfa's special statement stated, which is the competent supervisory authority in the case of RBA Leasing. 

Simply put, it was determined that RBA Leasing clients were paying higher installments completely without merit and without informing the end-user.

More than 15,000 contracts in question 

The Decision points out as many as 15,684 contracts in question during that period. But, some clients realized that the installments are too high. RBA Leasing backed down when clients realized that they were paying larger sums; they ended up paying exactly as they should have. RBA Leasing didn't inform other leasing users that they were paying higher installments.

"Certain leasing users were excluded in a way that their names were exhaustively listed in the decisions made by the Board of Directors, and the reasons for their exclusion weren't listed," Hanfa's Decision from March this year stated. It was also clear that RBA Leasing had a special list of clients whose installments didn't change. Hanfa didn't determine according to which criteria they approved the real installment for some clients and didn't mention it to the others. The RBA Leasing Supervisory Board was informed about everything, but they didn't object to this unfair and illegal practice.

Apparently, the Board of Directors and the Supervisory Board not only approved but also thoughtfully carried out this operation to get to the money that didn't belong to them, at the expense of the client.  

Again, we emphasize that this was happening at the time of a major economic crisis when every cent was important for many natural and legal persons. 

For leasing users who realized the scam, the bank would change the amount while failing to inform the others

Hanfa's findings showed this perfidious operation of seizing the money, which stated that RBA Leasing was changing fixed part of the interest rate only in one direction, i.e., when benchmark rates dropped, the Company increased the fixed part of the interest rate, i.e., increased the installments, but when the installments should have dropped, they remained on the same level.

They calculated the damages only for one-fifth of the contacts; it's 4.7 million euros

The extent of the damage isn't known for now. RBA Leasing reported to Hanfa the amount of 4.7 million euros, but that amount refers only to 3532 contracts, i.e., 22.5 percent of all contracts in question.

How did RBA Leasing inform the injured parties?

Hanfa ordered RBA Leasing to immediately eliminate the identified illegalities and irregularities and "to submit written observation to Hanfa within 30 days about all activities undertaken to their leasing users whose contract terms were unfounded, non-transparent, and unilaterally altered." And when RBA Leasing modus operandi was revealed, i.e., irregularities and illegalities, the problems started.

Firstly, RBA Leasing didn't inform the injured parties within 30 days due to the coronavirus epidemic and special circumstances.

They informed them as late as the beginning of June by a special letter sent to the injured parties. The letter did not indicate clearly that they were contacted due to damages. However, the letter had an attachment, i.e., the Hanfa's Decision on 12 pages written in legal language that is very difficult to understand. Many didn't even realize what that was all about.

We asked the people in charge of RBA Leasing whether such notice is really clear enough for the injured parties and in accordance with the Hanfa's Decision from mid-March this year.

How are you planning on settling the damages? We are in contact

We were informed that the clients who contacted RBA Leasing and realized they were being deceived, RBA Leasing responded that the limitation period had entered into force, and the clients cannot get back the money that was unlawfully taken from them.

"Raiffeisen Leasing complies with obligations in accordance with all applicable laws," RBA Leasing responded when we asked how the limitation period may have expired. We didn't get a clear answer on whether RBA Leasing will return money to the injured parties.

"The notice has been sent to the clients, and Raiffeisen Leasing continues its communications with all of them," they said from RBA Leasing. They don't think that this situation could harm the RBA Group or have a negative perception. 

Hanfa responded, now is DORH's turn 

Hanfa informed us about a certain number of leasing users who contacted them because RBA Leasing pointed to the limitation period as the reason why they couldn't count on compensation.

"Hanfa has no legal authority in determining the number of financial claims or whether the limitation period has entered into force in certain cases. Only the court makes decisions concerning the aforesaid, based on a lawsuit filed by a contracting party. According to our knowledge, some leasing users are considering filing a lawsuit, while others are negotiating with the Company," according to the response from Hanfa to Index's inquiry.

DORH and USKOK are informed about everything, and to our knowledge, at least one complaint was filed to their address about the illegality in RBA Leasing. We tried to get an answer from DORH, but they didn't want to respond to inquiries. However, we have informal information that they started investigating and that DORH came into possession of certain documentation.