From 1 January 2016, lenders must review their communication strategy. Credit advertising will be subject to stricter rules, and aggressive advertising will be controlled.
This revision is at the origin of Josiane Aubert (PS / VD) who, in 2010, filed a parliamentary initiative which aims to ban advertising for small claims. In 2014, the National Council and the Council of States approve it but let the sector regulate itself.
Following this review, the Swiss association of credit banks and lending institutions has established a self-regulation agreement. These are rules governing the principles relating to advertising for consumer credit, applied to the member institutions of the association.
The main changes are as follows:
Content of the self-regulation agreement
Advertising must no longer suggest that the institution minimizes consumer analysis. This involves removing ads like “You decide the amount of the monthly installments, whatever your income.”
Credits for short-term entertainment
Announcements will also be banned for claims related to expensive and short-term leisure activities such as holidays, weddings or anniversaries.
Furthermore, advertising can no longer use arguments that are not economically judicious, such as using a credit to repay tax debts.
From now on, it is forbidden to use sales methods that can shock or be ambiguous, such as the distribution on the street of slips for the request of a credit, and the prospects with graphics that resemble banknotes.
Young adults (under 25 years of age) will also be better protected: as of now, they can no longer be the target of consumer credit advertising. This translates into a ban on the topics, but also on the billboards: the arcades will no longer be able to accept consumer credit advertisements.
Penalties for non-compliance with the rules
Organizations that do not comply with these new rules in the face of a fine of USD 100,000. The agreement also extends the scope to partners of affiliated bodies. Contracting institutions are required, if necessary, to end collaboration with partners, such as mediators, who do not comply with this convention.
The candidate’s examination for obtaining a credit
This new measure complements the other provisions of the revision of the Consumer Credit Act. The lender may request the consumer to produce an extract from the crime report register as well as a tax return. In case of doubt, the credit institution may not be satisfied with these documents to verify the accuracy of customer information.
This agreement therefore aims to protect customers from unscrupulous bodies but also to protect customers from themselves, by checking in advance their solvency and financial strength.