2018-08-31
AB Šiaulių bankas fined for advertising in breach of the Law on Consumer Credit
AB Šiaulių bankas was fined €28,113 by the Board of the Board of the Bank of Lithuania for improper advertising of consumer credit offered on television. The standard information publishable in the template, relevant for the consumer, was presented at the bottom of the TV screen in a much smaller print than the interest rates advertised in a larger print in the centre of the screen. Moreover, standard information was only shown for a few seconds, hence too briefly for the consumer to read it and assess.
The Bank of Lithuania has conducted an investigation and established that such advertising was in breach of the major requirements governing consumer credit agreement advertising laid down in the Law on Consumer Credit.
The Bank of Lithuania holds a view that proper consumer credit agreement advertising would be such where the template with standard information for the consumer would be provided in a noticeable manner and would be shown for a time sufficient for the consumer to see and read the text published. Standard advertising information consists of six elements which allow the consumer perceiving the total cost of credit (the interest rate, consumer credit amount and all credit related expenditure, duration of the credit agreement, contribution payable and the total consumer credit amount payable by the consumer).
Considering the entirety of circumstances and the extenuating circumstances, AB Šiaulių bankas was fined for the improper advertising 0.03% of the total annual operating income for 2017.
In the Guidelines for Advertising Financial Services the Bank of Lithuania has explained market participants how to interpret the legislative requirements for the advertising of financial services and properly meet them; however, not everyone follows them. A few months ago the Bank of Lithuania also fined two companies for advertising on television consumer credit offered to residents by corporations, since it was not in compliance with all legislative requirements either.