Russian banks could see fines for violating advertising law quintuple - regulator

MOSCOW. April 24 (Interfax) - Switching to charging turnover fines for violations of the law on advertising by financial institutions would at least quintuple the size of such fines, the head of the Federal Antimonopoly Service (FAS), Maxim Shaskolsky said.

"I think by about at least five times," he told reporters when asked by how much fines could increase for advertising violations committed by banks.

"I think that all these violations are deliberate. Everyone understands the advertising law perfectly well, knows it well, and there's nothing difficult about making an ad in a way that it doesn't violate the law. This aggravates consumers, people are complaining. Such measures need to be taken to reduce such violations," Shaskolsky said, adding that with the current size of fines banks prefer to commit violations.

Fines for violating the advertising law now range from 100,000 to 500,000 rubles, but violations in the area of lending range from 600,000 to 1.6 million rubles. The FAS has long called for raising these fines given the large number of advertising violations. There were 4,209 cases opened last year, with 1,921 orders issued to eliminate advertising violations, the regulator said. Fines totaled 161.3 million rubles for the year.

The regulator said in March that it was working with the Central Bank to switch to charging financial institutions turnover fines for violating antimonopoly law in the area of advertising.

"The Bank of Russia generally supports this initiative, since one can only affect unethical behavior with economic measures if the financial liability is comparable to the benefit from it," the bank told Interfax earlier.