The court for the first time ordered the bank to place a “refuting” advertisement
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The Federal Antimonopoly Service created a precedent – it demanded that the bank, at its own expense, refute false advertising in the same volume and on the same television channel where this advertising was broadcast. Until now, such violations were mainly punishable only by a fine and a requirement to remove false advertising. The placement of “refutation” advertising is provided for by law, but since the proceedings always took many months, the courts considered this measure ineffective. If the precedent decision of the FAS becomes established in practice, it will turn out to be much more costly for the offending advertisers than fines.
On Friday, October 13, the Federal Antimonopoly Service (FAS) reported, which won a case against Raiffeisenbank in courts of three instances regarding improper advertising. Earlier, on October 11, the Moscow District Arbitration Court published the full text of the ruling (.pdf), in which the decisions of the first instance and the appellate instance were left unchanged and the bank’s cassation appeal was not satisfied.
We are talking about an advertisement for the bank’s “Cashback for Everything” service (aired on the REN TV channel in January-February 2022), which stated that it applies to all purchases without conditions and restrictions.
FAS proved that the conditions and restrictions of the financial product existed, but were placed in small print and demonstrated for a short time. The service issued an order to Raiffeisenbank to stop violating advertising laws and fined it. The bank complied with the order and paid the fine. Nevertheless, in February 2023, FAS filed a lawsuit with the Moscow Arbitration Court with a request to oblige Raiffeisenbank to carry out counter-advertising at its own expense. “In the counter-advertising, the company must indicate that the antimonopoly service has recognized the advertising of the debit cashback card as unreliable and cashback is not awarded for all types of transactions. Counter-advertising will have to be shown on the REN TV channel for seven days in prime time once a day,” the department said in a statement. Placement of counter-advertising must take place no later than one month from the date the court decision enters into force.
At the end of 2021, Deputy Head of the FAS Karina Taukenova reported that every fifth violation of advertising legislation occurs when advertising financial services. According to the department’s report, in 2021, more than 3.7 thousand cases were initiated for violations of advertising laws, more than 17% of violations occurred in advertising of financial services.
According to lawyers, the case with the Raiffeisenbank advertisement can be called a precedent, since previously the FAS was mainly limited to fines and orders to eliminate the violation.
Antimonopoly lawyer Natalya Pantyukhina believes: “In more than 15 years, this is perhaps the first effective court decision.” According to Oleg Moskvitin, a partner at the Muranov, Chernyakov and Partners bar association, situations where the FAS goes to court to refute an advertisement, in principle, do not happen often. Natalya Pantyukhina notes that when the service filed such demands, the courts generally rejected them, since five or six months could have passed since the advertisement and, according to the court, counter-advertising was ineffective: it would not protect consumers and would not restore violated public interests. Placing counter-advertising is a measure “more effective and complementary to the issuance of orders to eliminate violations and the imposition of fines, both from the point of view of protecting citizens and from the point of view of the reputational risks of violators,” says Oleg Moskvitin.
The FAS and Raiffeisenbank did not promptly respond to Kommersant’s request.
Bankers agree that the penalty of posting counter-advertising may be more significant than a fine.
According to the head of the National Council of the Financial Market (NCFM), Andrei Emelin, this decision means that the FAS has found “a new creative way to fine banks twice for unfair advertising.” At the same time, the additional financial punishment “in the form of purchasing advertising time may be even more significant than the main fine imposed by the service,” he estimates. As a result, banks will be more careful in advertising their products.
For consumers who may have already been sold the service, the placement of counter-advertising may go unnoticed. “We will have to look at the effect of the first experience of counter-advertising, but there is a possibility that most viewers simply will not understand what we are talking about,” says Mr. Emelin.
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