OREANDA-NEWS. May 07, 2010. The Courts of three instances confirmed validity of the decision of the Astrakhan OFAS Russia that "Alpha-Bank" OJSC, "AlphaStrakhovanie-Zhizn" Ltd. and "Securia" Ltd. violated the Federal Law "On Protection of Competition", and legitimacy of the OFAS determination that the companies should stop the violations, reported the press-centre of FAS Russia.          

Earlier the antimonopoly body found that "Alpha-Bank" OJSC, "AlphaStrakhovanie-Zhizn" Ltd. and "Securia" Ltd. violated Clause 5 Part 1 Article 11 and Part 2 Article 11 of the Federal Law "On Protection of Competition" by exercising concerted actions. Each of the participants of concerted actions was issued a determination to eliminate the violations.

A complaint from a client of "Alpha-Bank" OJSC, filed to the Astrakhan OFAS Russia, stated that when the client had approached a representative of "Alpha-Bank" OJSC to get a loan for buying a TV set, she was asked to sign an application form, a Notice about individual credit terms and conditions, a life insurance agreement and the Bank rates. The form of the Notice about individual credit terms and conditions included an application for transferring funds in payment for insurance premium under the life insurance agreement, payable to "AlphaStrakhovanie-Zhizn" Ltd., as well as in payment for the "Alpha-Khranitel" service package, payable to "Securia" Ltd.

The bank representative did not inform the client that life insurance was not mandatory for granting the loan as well as that by signing the Notice about individual credit terms and conditions she effectively agreed to enter into an insurance agreement. Also the client was not given a possibility to choose an insurance company that could provide the services for life insurance, as in the form of the Notice the Bank had already made provisions for insurance only with "AlphaStrakhovanie-Zhizn" Ltd. An insurance premium payable to "AlphaStrakhovanie-Zhizn" Ltd. was included in the total credit sum under the agreement.

As a result, the overall total credit was 27857 Rubles 45 kopecks instead of 24350 Rubles 92 kopecks required by the borrower, which increased the borrower's credit costs because the Bank charges higher credit percentage and commissions for a larger credit sum.

Borrowers' life insurance is not mandatory to obtain a loan. According to the laws of the Russian Federation, applying for a loan the borrower must insure only collateral to the creditor.

As consumer credit agreements of "Alpha-Bank" OJSC with physical persons are credit agreements without pledging property to the Bank, the Antimonopoly Office concluded that the Bank had no grounds to require the borrower to have an insurance to grant such type of credit.

The agreement conditions infringed the client interests because the client was not given a right to choose an organization capable to provide similar services as the form of the Notice about individual credit conditions already specified particular organizations. Another unfavourable condition for the client was the fee requested for additional services included in the credit costs. At the same time, the procedures established by the Bank for granting consumer credits through commercial organizations - partners of "Alpha-Bank" OJSC specify that if a client refuses to use additional services (life insurance and "Alpha-Khranitel"), an agent (a Bank officer) must refuse to grant the loan to the client.

The Astrakhan OFAS Russia concluded that when the borrower attempted to enter into a credit agreement, she was imposed unfavourable agreement conditions irrelevant to the subject matter of the agreement.

Having investigated the case, the Astrakhan OFAS Russia found that "Alpha-Bank" OJSC, "AlphaStrakhovanie-Zhizn" Ltd. and "Securia" Ltd. violated Clause 5 Part 1 Article 11 and Part 2 Article 11 of the Federal Law "On Protection of Competition" by exercising concerted actions. Each of the participants of concerted actions was issued a determination to eliminate the violations.

"AlphaStrakhovanie-Zhizn" Ltd. and "Alpha-Bank" OJSC filed lawsuits to the Astrakhan Regional Arbitration Court on invaliding the decision and determination of the Astrakhan OFAS Russia and later appealed its judgment to the Appeal Court and the Cassation Court.

The Court of First Instance and the Appeal Court, and then on 20th April 2010 the Cassation Court, dismissed the claims confirming validity of the decision and determination issued by the antimonopoly body.