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14 april 2022, 12:52
Chief Financial Ombudsman Yury Voronin took part in the round-table discussion on «Alternative ways of resolving disputes on the financial services market» organized by the Higher School of Economics in Moscow on April 13, 2022.
The speakers at the event were legal scholars as well as members of the Financial Ombudsman Service Council: Mikhail Mamuta, Member of the Bank of Russia Board of Directors, Head of the Service for Consumer Protection and Financial Inclusion of the Bank of Russia; Igor Jürgens, President of the All-Russian Union of Insurers; Sergei Belyakov, President of the Self-Regulated Organization «National Association of Non-State Pension Funds».
According to Yury Voronin, the institution of the Financial Ombudsman Service (FOS), which has been in operation since 2019, has succeeded and is fully performing all its functions. This, in particular, is evidenced by the statistics on the reduction in the number of court disputes as a result of the introduction of the out-of-court dispute settlement, which was cited by Chairman of the Supreme Court Vyacheslav Lebedev at the Meeting of judges of courts of general jurisdiction and arbitration courts chaired by President Vladimir Putin of the Russian Federation in February 2022. According to these data, the number of insurance disputes continues to decline: in 2019, the courts heard 221,000 cases, 119,000 cases in 2020, and 107,000 cases in 2021. There is also a reduction in disputes in the credit sector: 69,000 cases were heard by the courts in 2019, 50,000 cases in 2020 and 41,000 cases in 2021. This allows the courts to focus on solving complex, conflicting cases, leaving typical cases to the FOS.
Yury Voronin reported that the Financial Ombudsman Service had received 184,073 appeals in 2021*. The average turnaround time was 16 working days while in 48% of cases an independent review was required. The round-table speakers noted that this processing time is a significant advantage compared to a much longer trial process in court.
Financial ombudsmen issued 110,713 decisions in 2021. According to the Chief Financial Ombudsman, 34.8% (38,550 decisions) of these were in favour of the consumers. Yury Voronin urged to interpret this data taking into account the mandatory claim stage: before filing an appeal to the FOS, a consumer must send a claim to the financial institution and receive a response from it. With the emergence of the Financial Ombudsman Service, financial institutions have begun to change their course of actions and seek to settle disputes with clients at the claim stage. Therefore, in order to get a true picture of the satisfaction of consumer complaints, it is necessary to add up the outcomes of complaints handled by financial institutions at the claim stage and directly by the financial ombudsmen. However, even after passing the claim stage, when financial institutions were fully confident in the correctness of their position, financial ombudsmen nevertheless sided with consumers in more than 34% of the total number of appeals.
Financial institutions filed 13,365 complaints against the FOS decisions in 2021. 11,455 of them were considered by the courts of law.
542 decisions were overturned, which is 0.48% of the total number of decisions made and 4.05% of the decisions for which complaints were filed.
According to the Chief Financial Ombudsman, every second lawsuit filed by financial institutions has resulted in a claim for reduction of penalties under Article 333 of the Russian Civil Code. In this regard, vesting the ombudsman with the right to reduce the amount of penalties can substantially reduce the number of appeals against his decisions. Participants of the round-table discussion actively supported this initiative, noting that it is «long overdue».
Another problem in appealing against the FOS decisions is the provision of new evidence by the financial institution in court. In Yury Voronin’s opinion, the court should not take into account any evidence that was not presented by the parties to the dispute to the Financial Ombudsman Service during the consideration of the appeal, as it would undermine all previous work on the dispute and cause an additional press on the courts. If such a procedure for examining appeals against the FOS decisions were introduced (by analogy with the appellate proceedings in the courts), the parties would be motivated to present an exhaustive list of evidence at the pre-trial stage, which would help to make objective decisions and reduce the number of appeals.
According to Yury Voronin, the experience gained from the three-year out-of-court dispute resolution process is unique in Russia and could be used for broader purposes. In particular, he proposed that the Financial Ombudsman Service should be given the competence to consider disputes over unlawful transfers of pension savings and that the limit on the size of claims considered by the FOS in respect of appeals against non-state pension funds should be removed.
Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion of the Bank of Russia, said in his speech that the Bank of Russia “conceptually supports” initiatives to vest the Financial Ombudsman Service with new powers. In particular, he noted that the FOS could consider disputes between retail investors and professional financial market participants.
*Data on the work of the Financial Ombudsman Service in 2021 may be clarified in the Annual Report, which is to be published on the FOS website no later than June 1, 2022 in accordance with Federal Law of June 4, 2018 No. 123-ФЗ «On the Ombudsman for the Rights of Consumers of Financial Services».
