LTL 30,000 FINE FOR THE ADVERTISING ON THE FASTEST WAY TO MONEY

The Competition Council passed a decision concerning the compliance of the advertising statement “BIGBANK – the fastest way to money“ with the requirements of the Law on Advertising. It has been recognised that the advertising statement published by Balti Investeeringute Grupi Pank AS “BIGBANK – the fastest way to money“ is false, since “Bigbank“ is not the fastest consumer credit service provider although this is exactly the impression that a consumer could obtain from the claims in the advertising statement. The statement had mislead consumers and had an effect upon their economic behaviour, i.e., their decisions and actions related to the obtaining of a credit in this specific company thus eventually impairing other undertakings’‘ possibilities to compete. For the infringement of the provisions of Article 5 of the Law on Advertising Balti Investeeringute Grupi Pank AS was sanctioned by the Competition Council to a fine of LTL 30,000. The company was also obligated to discontinue the use of the misleading advertising statement and issue a corrective statement in respect of the advertisement that had been disseminated a sufficiently long time and on a particularly wide scale – on TV and radio channels, on the LCD screens in stores and the internet websites.

The investigation into the case was opened in response to the complaints lodged by General Financing, UAB and a consumer. The consumer claimed that, being led by the advertising statement he applied to a branch of “Bigbank“ seeking to obtain a LTL 1,000 loan. The entire loan granting procedure lasted for several days pending the examination of the consumer’s application and the transfer of money. Subsequently, the consumer learned that the credit issue procedures by some other entities providing consumer loans are mush shorter (in particular, in case the agreement is concluded electronically) than those employed by the “Bigbank“ branch. Having regard to the circumstances established in the course of the investigation and considered the differences in the time span between the filing of the application and the actual disbursement of the loan by a number of different entities providing consumer credits the Competition Council arrived at a conclusion that “Bigbank“ is not the fastest in terms of the issue of the loan to their consumers which contradicts the statement of the advertising.

The consumer credit services offered by “Bigbank“ like the services offered by its competitors constitute an alternative to bank loans the obtaining of which from the bank is normally quite lengthy procedure and is subject to the fulfilment of certain requirements. Therefore one of the most attractive features of the fast consumer credit facility ensuring its significant competitive advantage is the speed of the loan granting. For a consumer seeking to obtain a loan time is one of the vital factors, moreover that normally the interest rates for the fast consumer credits are higher than those applicable in case of regular bank crediting. The faster and the simpler it is possible to obtain the loan, the more attractive it is to consumers. Therefore a consumer was quite justifiably, having seen the advertising statement “BIGBANK – the fastest way to money“ expecting to obtain the loan much faster than it would have been made available to the consumer by competitors of the BIGBANK.