Unfair Commercial Practices Directive, Chapter 2, Article 5, 1. Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1., (b) Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 7, 1.

The use of a phrase which has a common interpretation, whereas this phrase is otherwise defined in the general terms of the trader, constitutes a misleading commercial practice as it induces the consumer to believe that the phrase is used in its common meaning.

The defendant, a bank, advertised a loan product by television advertisements and show-window posters indicating that the loan would be paid within 8 working days. Additional information (including the calculation of the 8 working days, maximum amount of loan, etc.), was not given. The defendant only referred to a telephone number and a website for more detailed information.

According to the terms and conditions, the defendant undertook to pay the loan within 8 working days as from the date of evaluation of the real property at site, provided that the amount of the loan did not exceed HUF 5,000,000. The loan was paid by "blocked transfer", i.e. the loan could only be accessed after the property insurance relating to the real property encumbered by mortgage was assigned to the defendant.

Does the use of a common phrase, whereas this phrase is otherwise defined in the general terms of the trader, constitute a misleading commercial practice as to leading the consumer to believe that the phrase is used in its common meaning?

The Competition Authority established that the period within which a loan will be granted qualifies as material information. The lack of information, the Authority held, might qualify as unfair even in case the consumer later on has the chance to receive full information of the product.

The Authority further stated that a commercial practice is not only unlawful when it causes a consumer to take a transactional decision, but also when the practice has a significant impact on the procedure, e.g. when it raises the consumer's attention. A commercial practice should be considered unlawful in the event the consumer contacts the trader based on misleading information. A consumer's decision only qualifies as a transactional decision if the consumer identifies his/her needs and chooses one trader from its competitors. The Authority further clarified that it is not a requirement for the qualification as "misleading commercial practice" that the consumer actually decides to enter into contract with the company.

The Authority continued to state that in determining as to whether a commercial practice should be considered unfair, the process should take as a benchmark the average consumer, who is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors relating to the goods in question. A consumer who trusts the reality of the advertising shall be considered as a rational consumer. It cannot be reasonably expected that the consumer controls the reality of the information provided in an advertising.

Finally, the Competition Authority established that the defendant gave a meaning to the "starting date of the payment of loan" which was different from the general meaning of this notion. As a result, the Authority held that it can influence the transactional decision of a consumer when commonly used notions are used in an uncommon content.

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The Competition Authority imposed a fine of HUF 5,000,000 (approx. EUR 19,000) on the defendant.