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10 december 2024, 15:02
The Financial Ombudsman Service (FOS) has published a list of unacceptable practices identified in the activities of financial institutions interacting with the Financial Ombudsman in the third quarter of 2024. “The leading position in terms of the prevalence of unacceptable practices is still being held by the consumer lending sector, Olga Kraynova, Head of the Ombudsman for financial services consumers support Service (OFSC).
One of the most notable examples is the unacceptable practice of including a one-off consultation as an additional service offered to the consumer when granting him a loan. Such counselling is “provided” directly at the conclusion of the contract, and its cost, as a rule, is many times as high as the cost of other additional services. At the same time, the consumer value of such a service is either low or entirely non-existent. “If such services were “rendered” to the consumer when granting him a loan, he should appeal to the Financial Ombudsman for protection of his rights, having previously submitted to the bank a demand for the return of the payment for the “services”, and a claim, should the bank refuse,” Olga Kraynova emphasised.
Olga Kraynova also pointed out that by making unfair practices known to the public, the Financial Ombudsman Service is trying to warn consumers about the possible risks they may face, and to encourage representatives of financial institutions to refrain from abusive practices.
The review of unacceptable practices is publicly available and contains the names of financial institutions that are involved in using such practices in their activities. For users’ greater convenience, the document is divided into blocks by types of financial institutions and also includes a description of each individual case identified by the Financial Ombudsman with a brief summary of the nature of the unacceptable practice.
“On the part of the FOS, we recommend that before seeking a service from a financial institution, the consumer should first read this review to determine whether the financial institution is using unfair practices,” Olga Kraynova recommended.
The review for Q3 2024 is available in a designated section, just click here.
