FAS AND THE CENTRAL BANK: LENDERS HAVE TO DISCLOSE FULL INFORMATION ON THE CONDITIONS OF PROFITABILITY OF SAVINGS PRODUCTS

The recommendations are developed to protect the rights of consumers of financial services

FAS Russia and the Bank of Russia have prepared a joint letter for credit institutions, which invited them to disclose full information on cumulative products.

Regulators have repeatedly identified cases when credit institutions improperly posted information on their websites about the conditions of savings products and the amount of possible income on them.

Credit organizations focus the attention of potential customers on the possibility of receiving interest on the balance of funds, without informing them about the presence of less attractive terms that directly affect the amount of consumer’s income. For example, the dependence of the interest rate on the amount or duration of funds in the account.

In some cases, information about cumulative products was disclosed exclusively in documents fixing the full terms and conditions of their service. At the same time, in order to familiarize potential consumers with them, it was necessary to perform additional actions – enter the organization's website or click on the link.

Such approaches to disclosure of information about a financial product may lead to unreasonable advantages over competitors and be considered as a violation of the Law on Protection of Competition.[1]

In this regard, FAS Russia and the Bank of Russia in their letter recommend that lenders post information on their websites in an equivalent font size, without using graphic techniques that allow displaying individual parameters less noticeable compared to others.

They also need to disclose information about changes in interest rates on savings products directly together with information about their size.

Regulators recommend disclosing this information directly on the pages of the relevant accumulative products on the websites of credit institutions and in documents containing conditions for these products.

Earlier, FAS Russia and the Bank of Russia issued similar recommendations on the disclosure of parameters of financial products.

For reference:

[1] Article 14.2 of the Law on Protection of Competition