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29 june 2022, 07:23
The Financial Ombudsman Service (FOS) held a session entitled “Open dialogue. Legal problems arising in disputes between consumers of financial services and financial institutions” as part of the 10th St Petersburg International Legal Forum.
The session was moderated by Chief Financial Ombudsman Yury Voronin, while the speakers included Head of the Ombudsman for financial services consumers support Service (OFSC) Olga Kraynova and Financial Ombudsmen Viktor Klimov, Svetlana Maximova, Tatiana Savitskaya, and Denis Novak.
Opening the session, Yury Voronin cited the main results of the institute of out-of-court dispute resolution between consumers and financial institutions. In 2021, the Financial Ombudsman Service received nearly 179,911 appeals, down 4% from 2020. “We see the decrease in the number of appeals as a positive factor. Much of the reason for this dynamics is the action of the claim stage of dispute resolution, in which before contacting the FOS, the consumer goes with the claim to the financial institution itself. It is at this stage that some disputes are withdrawn and do not reach the Financial Ombudsman,” Yury Voronin explained.
Most appeals were related to insurance – 161,629. There were 14,164 appeals against credit institutions and 1,724 against microfinance institutions. Last year, the average amount of consumer complaints was 200,730 rubles.
Financial ombudsmen issued 96,505 decisions on the merits, of which 38,550 or 39.9% were decisions where consumer claims were satisfied in full or in part, and 57,955 decisions or 60.1% were decisions denying satisfaction of consumer claims.
He said that the reduction in the number of claim settlements shows that business processes at the financial institution level have improved and there are fewer situations where a financial institution has behaved inappropriately. “A significant proportion of disputes where the consumer is right, are resolved just within the claim stage,” the Chief Financial Ombudsman elucidated.
Another key factor in reducing the share of decisions in favour of the consumer is a voluntary satisfaction by the financial institution of the consumer’s claims at the stage when the appeal has already reached the Financial Ombudsman. “In this case, the financial ombudsman makes a decision to dismiss the claim because the financial institution has settled the dispute,” Yury Voronin added.
Head of the OFSC Olga Kraynova noted that an important advantage of the FOS is the simple procedure for consumers of financial services, which provides, among other things, assistance to the consumer in filing an appeal. The Service has introduced a number of services that further simplify interaction with consumers: filing an appeal to the Financial Ombudsman through the Portal of public services, “smart assistant” in the personal account of the applicant, chat-bot, virtual reception room, scaling the network of university-based legal clinics, the FRIENDLY project.
Olga Kraynova also spoke about the Service’s work under conditions of increased DDoS attacks in recent months, as well as about the organisation of work on issues related to the need for import substitution.
Financial Ombudsman Viktor Klimov spoke about the handling of appeals in the field of CMTPL insurance. For example, in 2021, the Russian Supreme Court adopted an approach whereby in the event of unjustified replacement of the in-kind form of CMTPL insurance compensation with a cash compensation, the insurance company must make the payment without regard to depreciation. This position has had a positive effect on consumer rights.
Financial Ombudsman Svetlana Maximova drew attention to changes in practice due to changes in the general economic situation and rising prices for spare parts, as well as to a number of unfair practices identified in the insurance sector in general.
Financial Ombudsman Denis Novak focused his speech on the specifics of handling complaints against credit institutions. He drew attention to a number of controversial issues on which there is currently no uniform approach in court practice.
Financial Ombudsman Tatyana Savitskaya, continuing the theme of consumer relations with credit institutions, highlighted some topical issues requiring early resolution at the legislative level. For example, the issue of a consumer’s loss of a significant portion of interest on a deposit as a result of early termination of the contract when the money in the deposit is foreclosed on the basis of a writ of execution needs to be resolved.
