Banking ads regulated

Commercials must be clear and accurate

The Banking Control Commission of the Central Bank (BDL) has issued a circular regulating all advertisements of banking products, mainly loans and financial facilities. The circular outlines procedures required by banks and financial institutions to implement the BDL’s Basic Circular 124, issued in 2010.

The rules state that any direct or indirect advertisement must be clear, comprehensive, and accurate. The advertisement must clearly state the value or ceiling of the loan, its duration, its reimbursement method (monthly), number of payments, and the date of each installment. The ad must also mention the grace periods and the duration of any other incentives, if applicable.

In addition, advertisements should include the interest rate and computing method (annual), as well as an indication stating whether it is fixed or variable. The interest rate should be computed based on the Typical Annual Percentage Rate, which includes all costs, even those that are related to the customer (including age and financial status), or to the loan purpose, car, house. This rate should be calculated so that it applies on at least two thirds of customers. The rate must be inclusive of all expenses, commissions, expenditure, charges, and other costs the customer might be required to pay throughout the loan process. This rate can, however, exclude the insurance costs (such as for a car loan), but the advertisement should mention the omission.

The rules also state that any institution wishing to advertise any of its products should explicitly mention the specifications and conditions of this product on its website, in addition to a simulation allowing the client to calculate the final cost of the product.

The rules are binding for all banks and financial institutions that are regulated by the BDL as of the beginning of May.