AFM imposes an administrative fine on N.C.I.C. B.V. for misleading trade practices


Update 10 October 2012: The decision of the AFM has since become final and it can no longer be submitted to the courts for review.

On 11 May 2012, The Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €20,000 on N.C.I.C. B.V. (NCIC), established in Enschede, for misleading trade practices. NCIC therefore infringed the Dutch Consumer Protection (Enforcement) Act (Whc). In any event, the company conducted misleading telephone calls with consumers from 18 March 2011 to 23 August 2011.

The AFM has established that NCIC gathered more than just contact details from consumers via a call centre. It concerned details relevant for purchasing a financial product, which related to the work, income, mortgage or rental expenses, and any BKR listings of consumers. This information was passed on to a financial service provider that is affiliated to NCIC.

When gathering this information, NCIC issued false or misleading information to consumers concerning NCIC’s working methods. The AFM listened to a total of 20 telephone calls. In three of these calls, the consumer was told that NCIC is ‘not a commercial institution’ and/or that the call centre employee was not trying to sell anything. In one call, the employee suggested that NCIC is a government authority. In 7 of the 20 calls, it was said that they were calling to provide a 'service', to ‘help’ the consumer, to ‘provide information’ and/or that they had started a 'campaign’.

As regards the reason for the phone call, in 13 cases the call centre employees said that the consumer had a loan ‘at the old interest rate’, and/or that the consumer ‘had not yet had an interest rate decrease’. In addition, in 13 calls the employees stated that (it was being examined whether) the consumer ‘was eligible’ for or ‘entitled to’ a decrease in interest rate.

The call centre employees also used the name ‘National Consumer Information Centre’ when they explained on whose behalf they were calling, which is misleading. They were suggesting with this name that NCIC is not a commercial institution, but an 'information centre' and therefore only provides information. However, the NCIC’s activities are indeed of a commercial nature. NCIC provides quality leads to a financial service provider for the purpose of possibly contracting consumer credit.

Providing false or misleading information is a misleading trade practice as referred to in Article 6:193c of the Dutch Civil Code. Performing misleading and thus unfair trade practices is prohibited pursuant Article 8.8 of the Whc.

Violation of this Article of the Whc is subject to a maximum fine of €450,000. The AFM has moderated the fine to €20,000.

If you have any questions or complaints, you can contact the AFM's Financial Markets Information Line at: 0800 5400 540 (free of charge).

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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