The Federal Anti-monopoly Service requires credit proposals to include all conditions affecting their price.

02.02.2012

Legal Update No. 326
 
Goltsblat BLP advises that a number of car companies have lately been held administratively liable by the Federal Anti-monopoly Service for not providing the requisite information in commercials advertising credit proposals broadcast by central and cable television channels at their request.

The commercials recognised as improper displayed the credit interest offered by partner banks in large type and legibly, whereas the other terms and conditions affecting the cost of the loan services were displayed in small type and illegibly. The Federal Anti-monopoly Service concluded that this was in breach of the following regulations of the Federal Law "On Advertising":

  • part 7, Article 5, which prohibits advertising not containing material information on the advertised product and the conditions of its purchase and use, if such omission distorts the meaning of the information or misleads consumers;
  • paragraph 2, part 2, Article 28, which prohibits financial services advertising concealing other terms for rendering the relevant services that affect the income that will be received by parties that use the services or the costs incurred thereby, if the advertisement communicates at least one such term or condition.
  • part 3, Article 28, according to which, if an advertisement for services relating to extension of loans communicates at least one condition affecting the cost of the loan, such an advertisement should disclose all the other conditions affecting the actual cost of the loan to the borrower.

The Federal Anti-monopoly Service states in its resolutions that costs to be incurred by consumers to whom loans are extended for buying a car are determined on the basis of payments to be made by the borrower under the loan agreement during the credit term, depending on the amount borrowed. Thus, the conditions determining the cost of a loan for the borrower include the sum itself, the term of the credit agreement, the interest rate, any lump sum and regular payments, as well as other conditions, if their inclusion in the loan agreement might affect payments to be made by the borrower to the creditor thereunder.

The Federal Anti-monopoly Service regarded conditions affecting the cost of credit services and displayed in commercials in small type and illegibly as having been provided formally, since the conditions were displayed in such a way that consumer was unable to perceive the information. This means that this information could not reach the general public in a proper manner, with the result that consumers were unable to receive the information provided for by law and were misled regarding the financial services offered.
 
to Elena Trusova
Partner, IP Practice
Goltsblat BLP
T: +7 (495) 287 44 44
E: info@gblplaw.com

to Yana Pylaeva
Associate, IP Practice
Goltsblat BLP
T: +7 (495) 287 44 44
E: info@gblplaw.com

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