OREANDA-NEWS. April 30, 2008. The Federal Antimonopoly Service (FAS Russia) recognized that credit advertising by the "Avangard" Share-Holding Commercial Bank OJSC were improper and issued a determination to the bank requesting it to stop the violations of the advertising legislation, reported the press-centre of FAS Russia.

In October 2007, a credit advertisement of the "Avangard" Share-Holding Commercial Bank OJSC was displayed on the advertising structures in Moscow as well as on the sides of public conveyances. It contained the following information: "Bank Avangard Auto-credit 0 % up to 5 years (495) 234 9898 www.avangard.ru".

In addition, the advertisement included the following information in small, non-legible print: "Charges for loan formalization - 4000 Rubles. In case of breaching the loan payment schedule or the contract terms, the interest rate is increased by 12% per annum, and commission is charged monthly - 1% of the outstanding amount. Penalty, charged daily in case of breaching the terms of early loan repayment - 0,2% of the outstanding amount. The rates of "Avangard-Garant" Insurance Group" CJSC: motor vehicle insurance - from 475% of the value per annum; accident insurance – 0,99% per year of the amount of credit (paid as a lump-sum for the overall credit period); security equipment - according to the insurance terms. All terms and conditions are published on www.avangard.ru".

In accordance with Clauses 2 Part 2 and Part 3 Article 28 of the Federal Law "On Advertising", in advertising of financial services it is forbidden to conceal other terms and conditions for offering relevant services, which affect the amount of income to be gained by the persons who use the services, or the amount of expenses to be spent by the persons who use the services, if the advertisement informs about at least one of such terms and conditions.

Under Part 3 Article 28 of the Federal Law "On Advertising", if an advertisement of the services related to credit granting, using and repaying, contains at least one of the conditions affecting the credit cost, such an advertisement must include all other conditions which determine and affect the actual cost of the credit for the borrowers.

The above credit advertising of the "Avangard" Share-Holding Commercial Bank OJSC mentioned such contract terms as the credit interest rate - 0 % per annum. At the same time, apart from the interest rate on the advertised credit, the credit rates of the "Avangard" Share-Holding Commercial Bank OJSC included 4000 Rubles charge for loan formalization. Legalistically, the information on the above condition was present in the advertisement. However, such information was given in small print, which did not allow consumers to perceive it.

FAS Russia concluded that regardless formal presence of the information on other credit terms and conditions, affecting its cost, in the advertisement, apart from the information on the interest rate given in large print the above data were presented in such a way that consumers had difficulties perceiving it, so effectively such information was absent in the advertisement. Therefore, the above advertisement of the credits of the "Avangard" Share-Holding Commercial Bank OJSC violated Clauses 2 Part 2 and Part 3 Article 28 of the Federal Law "On Advertising".

Under Article 38 of the Federal Law "On Advertising", the advertiser is liable for violating the statutory requirements of the Russian Federation on advertising, specified in Article 28 of the Federal Law "On Advertising". The advertisement in question was disseminated by the "Avangard" Share-Holding Commercial Bank OJSC.