Contact center
(from Russia)
ext 00020 (from abroad)
Monday - Friday from 8:00 to 20:00 (Moscow time), except public holidays, free call from regions of Russia
08 december 2023, 14:53
The Federal Law “On Amendments to the Federal Law “On the Ombudsman for the Rights of Consumers of Financial Services”” has been adopted. The text of the law was released in the official publication on 13 June 2023.
The mentioned law gives the Financial Ombudsman competence to consider citizens’ appeals related to the illegal transfer of their pension savings from the Pension and Social Insurance Fund (formerly the Russian Pension Fund) to a non-state pension fund or between non-state pension insurance funds within the framework of the out-of-court dispute resolution procedure. The law also provides a number of norms aimed at improving the current procedure for out-of-court dispute resolution by the Financial Ombudsman between financial institutions and consumers, increasing the activity’s efficiency in considering consumers’ appeals and, accordingly, protecting the rights of consumers of financial services.
“The Financial Ombudsman Service (FOS) together with the Bank of Russia, the Russian Ministry of Justice and other concerned parties have been working on these amendments for more than a year. The new competences that this law grants to the Financial Ombudsman will allow to provide legal protection to a greater number of citizens, and the amendments on improvement of activities will make the process of appeal consideration more efficient,” Chief Financial Ombudsman Yury Voronin noted.
Protection of pension rights
In accordance with the amendments, as from 11 December 2023 the Financial Ombudsman has the right to consider consumer appeals in relation to non-state pension funds containing claims for the return of pension savings to the previous insurer in connection with the non-conclusion of the contract on compulsory pension insurance on the grounds that the application for transfer to the non-state pension fund or the contract on compulsory pension insurance was not signed by the insured person or his authorised representative – the so-called illegal transfers from one fund to another. An appeal with such claims may be sent to the Financial Ombudsman before the provision of funded pension, fixed-term pension payment or lump-sum payment of pension savings to the claimant, if no more than three years have passed since the date when the claimant learnt or should have learnt about the violation of his/her right.
In addition, the Financial Ombudsman generally considers consumer claims of up to 500,000 roubles (except for CMTPL insurance). The amendments remove this restriction on consumer claims against non-state pension funds under compulsory pension insurance contracts and non-state pension provision contracts. This is due, among other things, to the fact that citizens are often unable to assess their claims in terms of the amount of their monthly pension, since complex mathematical calculations are used in determining the amount of the pension, and therefore make claims for the entire amount of pension savings (pension reserves).
The law eliminates the ambiguity regarding the possibility for a Financial Ombudsman to consider appeals with a demand for the appointment of funded and non-state pensions – such a demand is subject to consideration by the Financial Ombudsman.
Improvement of the out-of-court dispute resolution procedure
Practical implementation of the Law on Financial Ombudsman during the last four years has revealed a number of provisions that require improvement for more effective consideration of citizens’ appeals. In this regard, the law contains a number of important amendments.
Thus, the term has been reduced from 15 calendar days to 7 working days for providing information at the request of the Financial Ombudsman by state authorities, local self-government bodies and other organisations. Such modification is aimed at ensuring the possibility for the Financial Ombudsman to receive the information necessary for appeal consideration within the term within which the Financial Ombudsman is to consider the appeal (15 working days).
There arise situations in the Financial Ombudsman’s practice when, in order to fully consider an appeal, information is required from a financial institution other than the one against which the appeal has been received. The law now establishes a shortened term for providing such information – 5 working days (it used to be 15 calendar days).
The law also gives the Financial Ombudsman the right to request documents and information necessary for consideration of the appeal from the consumers themselves.
The possibility is provided for the Financial Ombudsman to replace the financial institution, against which the appeal has been filed, with another financial institution. Such a right is essential due to the fact that several financial institutions are involved in relations with the consumer and the consumer is not always able to identify the ‘proper’ party to the dispute on his/her own.
For instance, a credit organisation acting as an agent of an insurance company when concluding a loan agreement also concludes an insurance contract with the consumer on behalf of the insurer. Upon subsequent cancellation of insurance services, the consumer often wants to recover a portion of the insurance premium and contacts the bank. However, as a rule, it is the insurer that will be the "proper defendant" for such a claim. In these situations, the Financial Ombudsman has to refuse to satisfy the consumer’s claims and has to clarify that the legal relationship has arisen between the consumer and the insurance company. In this case, the process of restoration of the consumer’s violated right is delayed. Now this problem has been resolved.
One of the most important amendments is the clarification of the rule on suspension of the decision enforcement. For instance, an insurance organisation that does not dispute the amount of insurance indemnity calculated by the Financial Ombudsman, but disagrees with the amount of penalties levied by the Financial Ombudsman for violation of the term of fulfilment of the obligation, may lodge an appeal against the Financial Ombudsman’s decision in court either in full or only in part of the penalties. In this case, it is logical to suspend the enforcement of the Financial Ombudsman’s decision only in the contested part, thus ensuring that the consumer has the opportunity to receive the insurance indemnity to which he or she is entitled and for which there has been no dispute. Now the law allows to suspend the enforcement of the Financial Ombudsman’s decision in part.
The amendments also relate to the arrangement of expert examination by the Financial Ombudsman within the appeal consideration procedure, correction of misprints and obvious arithmetical errors in the Financial Ombudsman’s decision, and other matters of procedure.
