From 1 January 2016, credit institutions must review their communication strategy. Advertising for credits will be subject to a stricter rule, and aggressive advertising will now be framed.
This revision is at the origin of Josiane Aubert (PS / VD) who tabled in 2010 a parliamentary initiative to ban advertising for small loans. In 2014, the National Council and the Council of States approved it, but left the sector to self-regulate.
Following this review, the Swiss association of credit banks and financial institutions established a self-regulatory agreement. These are rules that govern the principles relating to advertising for consumer loans, applied to establishments that are members of the association.
Content of the self-regulatory agreement
1. Credits granted quickly
Advertising can no longer imply that consumer credits can be granted quickly. In fact, the shock hooks are abandoned, such as: “Credit Express”, “Examination in 30 minutes”, “money transfer within 4 hours”.
2. Consumer analysis
Advertising should no longer suggest that the establishment is minimizing consumer analysis. This involves removing ads like “You determine your monthly payments, regardless of your income.”
3. Credits for short-term leisure
Ads for credits for expensive and short-term leisure activities will also be banned, such as vacations, weddings or birthdays.
4. Economic arguments
Advertising can no longer use arguments that are unwise from an economic point of view. For example, using a credit to pay off a tax debt.
5. Sales methods
It is now prohibited to use sales methods that may shock or be ambiguous, such as the distribution of credit request stubs on the public highway, and flyers with graphics reminiscent of banknotes.
6. Young people
Young adults (under 25) will also be better protected: they can no longer be the target of consumer credit advertising. This results in the prohibition of arguments, but also of display places: the game rooms will no longer be able to accommodate consumer credit advertisements.
Sanctions for non-compliance with the rules
Organizations that do not comply with these new rules risk a fine of $ 100,000. In addition, the convention widens the field of application to partners of affiliated organizations. Establishments adhering to the agreement are required, if necessary, to end the collaboration with their partners, such as brokers, who would not respect this agreement.
The examination of the candidate for obtaining a credit
This new measure complements the other provisions of the revision of the law on consumer credit. The lending institution may require the consumer to produce an extract from the prosecution register as well as an income certificate. In case of doubt, the credit organization may not be satisfied with these papers to verify the accuracy of the customer’s information.
The will is therefore to protect the customers of unscrupulous organizations, but also to protect them from themselves, by ensuring beforehand their solvency and their financial solidity.