06 august 2024, 13:31

Financial Ombudsman recovers funds transfer fee withheld by bank in favour of a consumer

A resident of the city of Togliatti appealed to a major bank from the first ten top ones with a demand to return the commission for the transfer of funds from one of his cards to another, both issued in the same financial institutions. First, he had transferred funds to his account from another bank, and when making the transaction he was not notified about to which account the funds were being credited, as the financial institution transferred them to the credit account by default.

The client then transferred funds from his credit card to his debit card, and the bank charged a fee for that service. The Togliatti resident then filed an appeal with the Financial Ombudsman Service (FOS) to recover the commission of RUB 35,550 withheld by the financial institution.

In July 2023, the applicant and the financial institution entered into a consumer loan agreement providing for the issuance of a credit card and the opening and crediting of a credit card account. In accordance with the individual terms and conditions of the loan agreement, the client was granted a credit limit of RUB 170,000.

In addition, a bank account was opened in the applicant’s name at the financial institution and a bank card was issued, so that the client had both a credit account and a debit account. On 10 June 2024, the applicant used his telephone number to transfer funds in the amount of RUB 600,000 from his account at another bank to an account at the financial institution with which he had a credit agreement.

In the application, the applicant stated that he had no intention to transfer funds to the credit account, as his goal was to open a deposit with the bank. At the time of the transaction, the client was not duly notified of the funds being credited to the credit account.

On the same day, the client transferred funds in the amount of RUB 600,000 from a credit card to a debit card, and the financial institution withheld a transaction fee of RUB 35,550.

Financial Ombudsman Tatiana Savitskaya clarifies: “In fact, the bank did not inform the applicant, who is an economically weak and dependent party in legal relations with the financial institution, about the account to which the funds were transferred. The bank, as a bona-fide participant in civil turnover, acting with due care and diligence, should have taken reasonable steps to establish the correspondence of the telephone number indicated by the applicant with the beneficiary’s account number and credit the funds to the account, the disposal of which does not cause the applicant to incur additional expenses, including those related to the payment of commissions.”

Given that the financial institution was reliably aware of the existence of a second account opened in the applicant’s name, and that the first account was a credit card account, the disposal of funds on which was subject to withholding additional commissions from the applicant, the bank’s actions in crediting funds to this account cannot be recognised as bona-fide.

Taking into account that the financial institution is a professional participant of legal relations with the applicant, the bank is obliged to compensate the client for losses in the form of commission fees withheld by the financial institution in the course of transferring funds from one account to another.

The bank did not provide information and documents confirming the existence of circumstances that are grounds for exemption from reimbursement of losses, the applicant’s claim for recovery of funds constituting the commission is reasonable and subject to satisfaction in the amount of RUB 35,550.

The Financial Ombudsman decided to recover the monetary funds withheld by the bank in payment of the commission fee for a credit card money transfer transaction in favour of the applicant.

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