Банкеръ Weekly



The managers of the United Bulgarian Bank (UBB) are going to appeal before the Supreme Administrative Court against the BGN100,000 fine imposed by the Commission for the Protection of Competition (CPC). The sanction came as a result of the commission's statement that the bank sold debit and credit cards illegally.We have not officially received the motives of the commission yet, but anyway we are going to file an appeal against the sanction. However, we want to see the motives in order to prepare our defence in court, UBB CEO Stiliyan Vutev told the BANKER weekly.The fine that CPC imposed on the bank provoked excitement in the financial and crediting system. According to some bank managers, it is just a prelude to a series of sanctions that the commission is preparing to impose on the banks. UBB was punished because, according to the CPC experts, it had violated art. 30 and art. 36 of the Protection of Competition Act. The reason is that in the period May 20 - June 25, 2004, the bank appealed on its official website that the holders of its VISA credit cards take part in a lottery offering prizes such as trips to Athens, cameras and CD players. The law does not allow it to do so if the value of the prize exceeds the one of the good or service offered.In fact, this definition hides the answer to the question whether or not UBB violated the competition protection laws. If the value of the good or service means the value of the card, it is quite insignificant - between BGN2 and BGN5. Moreover, the customers of UBB do not pay for the issuance of these credit cards. Therefore, the bank should not be held responsible for the prize taken by those of its customers who won the lottery, because the tourist package is actually paid by the National Bank of Greece and not by UBB. The lottery itself was initiated by the VISA company, while the Bulgarian bank acted as an intermediary. What is more, UBB was not the only credit institution that took part in its organisation.If by saying a service the CPC means the UBB requirement that only customers who paid more than BGN2,000 through their cards are allowed to participate in the lottery, the situation becomes even more complicated, because both the cameras and the CD players are worth several times less. The problem is how much the tourist packages cost. If they cost less than EUR1,000, the CPC should not impose sanctions for the promotion of these prizes.Anyway, it's the Supreme Administrative Court to decide who is the right side in this argument. Banks should now grow very careful when organising their advertising campaigns and promotions, because the CPC will watch their actions closely. According to sources familiar with the commission's activities, its experts found out that in the fight to attract more customers the banks have made many violations of the competition protection law. Although small ones, these violations give a reason for them to be sanctioned. Some experts even forecast that a lot of credit institutions will be punished by the CPC next year and that the total amount of sanctions imposed will reach several million levs.

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