FAS AND CENTRAL BANK WARN BANKS ABOUT FAITHFULLY INFORMING CUSTOMERS ABOUT CASHBACK
Regulators believe that recommendations will improve competitive environment in the banking services market and respect rights and interests of customers
FAS Russia and the Central Bank of Russia have prepared a joint letter for credit institutions, in which they offer creditors to disclose full information on bonus programs. We are talking about the possibility of receiving a "cashback" - a refund of part of the purchase price in cash or bonuses if the client fulfills certain conditions.
When promoting their products, credit organizations focus the attention of potential customers on certain properties that cause increased consumer interest in the product. However, they do not properly inform consumers about the presence of additional conditions and/or restrictions that directly affect the size of the "cashback". In addition, credit institutions do not provide customers with the opportunity to familiarize themselves with the documents fixing these conditions.
Such information includes the maximum amount of "cashback" for a certain period, the maximum and minimum purchase amount from which it will be charged, a list of MCC codes [1] involved in the calculation.
In this regard, FAS Russia and the Bank of Russia in their letter recommend creditors to provide potential customers with unhindered access to documents containing the full terms and conditions for servicing bank cards with the possibility of receiving cashback.
At the same time, consumers should not perform additional actions, particularly, click on links and do sensory manipulations.
FAS Russia reminds that the actions that mislead customers can be considered as a violation of the Law on Protection of Competition [2] and the Law on Advertising [3].
Reference:
[1] The Merchant Category Code (MCC) is a four–digit code that defines the type of activity of the seller in transactions with a bank card. According to it, banks determine the purchase category and the percentage of "cashback".
[2] Federal Law No. 135-FZ of 26.07.2006 "On Protection of Competition".
[3] Federal Law No. 38-FZ of 13.03.2006 "On Advertising".