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The Government of the Republic of Serbia

In the service of citizens

Law on Public Advertising violated in consumer loan ads

Belgrade, 13 April 2006

Serbian Minister of Trade, Tourism and Services Bojan Dimitrijevic has called on banks not to mislead citizens in their commercials for consumer loans as it is against the Law on Public Advertising.

Bojan Dimitrijevic

Dimitrijevic told a press conference that banks will be warned that disrespecting this law will result in bans on broadcasting such commercials and court fines for commercial offence in the amounts from 300,000 dinars to 3 million dinars while fines for disrespecting the law will amount to between 100,000 dinars and 1 million dinars.

The Minister said that the “deceiving messages” leave out important information, use ambiguous and vague expressions as well as misinformation on terms for using banking services.

According to Dimitrijevic, some banks illegally compare the advantage of using an unnamed service with financial difficulties of an employer to pay out salaries, which misleads users so they do not know whether the service is the payment of salary or a loan. This creates the illusion that citizens do not even have to receive the salary, but simply go to the bank and take it, he explained. Another aspect of the fraud is the fact that citizens are not properly and correctly informed on whether by using certain services of a bank they will find themselves in a more favourable or unfavourable position, Dimitrijevic said.

Dimitrijevic warned citizens to think things through very carefully before taking a loan as well as to do that only when there is no other possibility for them, because getting indebted at such high interest rates is definitely not in their interest.

In some of these commercials there is even gender discrimination, said the Minister and added that this forceful promotion of loans is undoubtedly helping increase the inflation rate.

Dimitrijevic invited the Consumer Protection Department of the National Bank of Serbia to look into these cases together with the Ministry of Trade, Tourism and Services. He said that there are instances of the breach of the Law on consumer protection in these commercials.

He stressed that the ministry thinks that this law is respected in general, but also breached in certain cases, such as catalogue sales. Market inspectors have checked into several of these cases and some were even sent to court. Dimitrijevic said that sale of goods in private houses will also come under special control.