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Case detail

B a c k

Directive article Article 2 (b)
Article 2 (d)
Article 5 1.
Article 5 2.
Article 5 4. (b)
Annex I al1 9.
National ID Consumer Rights Protection Centre Decision No. E03-PTU-F23-33
Country Latvia Decision date 05/07/2012
Common name Decision type Administrative decision, first degree
Court Patērētāju Tiesību Aizsardzības Centrs (Rīga) Plaintiff(s) SIA „Lombards”
Court translation Consumer Rights Protection Centre (Riga) Defendant(s) Consumer Rights Protection Centre (CRPC)
Subject misleading commercial practices
Keywords advertisementauthorisationdeceiving commercial practicefinancial servicesidentity of the trader

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Headnote

It constitutes a misleading commercial practice to display the name of an undertaking in circumstances where such a name is misleading as to the services provided by the undertaking.

Facts

The plaintiff is an undertaking which provides commission services (a commission contract is a contract by which one party entrusts to another party movable property in order for it to be sold at a certain price, upon the condition that the recipient shall, after a certain period of time or, pursuant to the request of the owner, either pay the price referred to or return the property).

The location where plaintiff provided its services accommodated a signboard containing the name of the undertaking “Lombards” (“Pawnshop”).

According to Latvian legislation, the term “Pawnshop” is used in regard to consumer crediting services. In order to provide consumer crediting services, the respective undertaking is obliged to obtain a special permit from the CRPC.

In the present case, the plaintiff had not obtained the necessary permit, however the signboard indicated to consumers that the plaintiff is entitled to grant a credit in exchange for movable property.

Consequently, the court accused the plaintiff of performing misleading commercial practices. 
 

Legal issue

May the indication of an undertaking’s commercial name be considered a misleading commercial practice?

Decision

The court, having examined all the circumstances of the case and the information provided by the plaintiff, found that the plaintiff is not entitled to display a signboard containing its commercial name in circumstances where such a sign might be misleading as to the services provided by the plaintiff.

The court thus concluded that such actions amount to a misleading commercial practice.
 

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Result

Plaintiff was penalized for committing a misleading commercial practice, and was requested to discontinue the display of the misleading sign.

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