FAS calls the banks’ underestimation of the full cost of the loan unfair competition

by time news

The Federal Antimonopoly Service (FAS) called the artificial understatement by banks of the full cost of a loan (FCS) unfair competition and suggested the banking community to legislate it.

So, the deputy head of the FAS, Andrei Kashevarov, suggested that the Association of Russian Banks (ARB) conduct a survey among its participants about whether credit institutions that underestimate the CPM get an advantage over those who indicate it accurately. He stated that this practice falls within the scope of Art. 14.7 of the Code of Administrative Offenses of the Russian Federation (“Misleading the consumer regarding the consumer properties of the product”) and the FAS, together with the Central Bank, may consider complaints against banks that are suspected of being in it.

According to Kashevarov, if cases of understatement of the CPC are detected at the first stage, such banks can be warned. The head of the Service for the Protection of Consumer Rights and Ensuring the Availability of Financial Services of the Central Bank of the Russian Federation, Mikhail Mamuta, said that the idea deserves attention. ARB President Garegin Tosunyan also supported the proposal, declaring his readiness to help conduct a survey among the banking community.

The full cost of a loan includes not only the principal amount and interest on it, but also additional payments and expenses for servicing the loan, including, for example, insurance premium and commission for issuing and servicing a credit card. Therefore, the value of the effective interest rate is higher than the rate on the loan itself, however, according to the law at the time of the conclusion of the agreement, it cannot exceed the average market value calculated by the Central Bank by more than a third.

At the same time, in addition to additional services related to the loan, such as insurance, banks can offer consumers voluntary additional services that are not related to the parameters of the loan and the possibility of obtaining it. Currently, fees for such services are not included in the calculation of the CPM.

In October, the Central Bank proposed to credit and microfinance organizations to expand the concept of CPM to include any additional payments that the borrower may have when applying for a loan.

This happened after an appeal to the regulator by representatives of the All-Russian Popular Front, who indicated ways of circumventing the law by banks. For example, banks offer a borrower who comes for a cash loan with a lower CPM to get a card with a higher loan cost. Also, banks can establish the dependence of the loan rate on the receipt of additional services not related to insurance, use the mechanism of “ladder” rates, or conclude an additional agreement to increase the rate simultaneously with the loan agreement.

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