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31 march 2023, 12:13
The Financial Ombudsman Service (FOS) has published a list of unacceptable practices identified in the activities of financial institutions interacting with the Financial Ombudsman for the fourth quarter of 2022.
“Last year we started the practice of publishing such reviews. In the fourth quarter, eight types of practices were identified which the Service classifies as unacceptable. Most of them concern consumer lending and one concerns life insurance,” said Olga Kraynova, the head of the Ombudsman for financial services consumers support Service (OFSC).
The review of practices mentions specific financial institutions which allow their use when interacting with consumers.
In reviewing appeals from consumers of financial services the FOS periodically identifies dishonest behaviour of financial institutions in their interaction with customers, Olga Kraynova elucidated.
Such behaviour is defined by the FOS as “unacceptable practices”, i.e. actions (inaction) of a financial institution which contradict the principles of bona-fide behaviour, reasonableness and fairness, do not take into account methodological approaches in the field of consumer rights protection set out in information and other letters of the Bank of Russia, and also cause or may cause losses to consumers of financial services and which are aimed at taking advantage from such activities.
“Often the abuses are not isolated, but are quite typical behaviour of an insurer or a bank within the framework of a product it sells or in relation to a particular typical situation. Not in all cases which we consider to be “unacceptable practice” are we able to promptly restore the violated rights of the person by satisfying their claims,” the Head of OFSC added.
Quite a few disputes are situations in which there are no formal grounds for satisfaction of consumer claims due to gaps in legal regulation of the issue.
Olga Kraynova said that the Service systematically sends information about the detected unacceptable practices to the Bank of Russia and publishes it on the FOS official website. “We expect that such information in public access will be useful for consumers, as it will raise their awareness of certain services of financial institutions,” she pointed out.
According to her, the publication of such reviews also aims to correct the behaviour of financial market participants. “Public information about the use of unacceptable practices by companies, as we expect, will encourage them to correct their actions towards their clients, which in turn will help to level competition and increase the level of trust in specific organizations and in the financial market as a whole,” Olga Kraynova added.
The review can be found here
