Russian anti-monopoly authorities note rise of law violations in financial advertising segment
Russia’s FAS reports that financial services ads accounted for 22.1% of all advertising violations.
Russia’s Federal Antimonopoly Service (FAS) has noted the rise in law violations by advertisers of financial services.
In its report for 2019, FAS estimates that financial services advertisements accounted for 22.1% of all advertising rules violations last year. This compares with a proportion of 12.75% in 2018.
Across all segments, financial services accounted for the highest number of violations in 2019, FAS says.
Last year, the Russian anti-monopoly authorities checked 18,179 reports about ads non-compliance with the laws on advertising. As a result, 4,068 actions were taken. Misleading advertising accounted or 14.45% of all breaches, somewhat higher than 11.56% registered in 2018.
As FinanceFeeds has reported, FAS has acted against ads by Forex companies that violated the Russian laws. For example, in October 2019, the Moscow office of FAS issued a statement regarding an advertising message by InstaForex. This followed a probe into the ads of InstaForex distributed via Yandex. The advertisement in question stated “InstaForex- official website – broker licensed by the Central Bank”.
FAS’s probe concluded that InstaForex was operating without a Forex dealer license from the Central Bank of Russia. Hence, the regulator determined that the law was breached by Yandex and by Instaforex’s representative who signed the advertising contract with Yandex.
In December 2019, FAS announced that it had found advertisement of FreshForex, distributed via Yandex, to be non-compliant with the law. The body found that FreshForex has no Forex dealer license issued by the Central Bank of Russia. Hence, the advertisement of the FX services of FreshForex are in breach of the law on advertising.
In addition, the advertisement included no warning about the high risks of losing the entire investment. The lack of such a disclaimer in the advertisement as well as its lack on the landing page to which it redirected is also in violation of the law on advertisement.
The Moscow office of FAS instructed Yandex Europe AG and Zaneta Seic to cease and desist from the above-mentioned violations and to stop the distribution of the ads in question.