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12 may 2023, 09:58
Financial Ombudsman Viktor Klimov spoke at the Financial Ombudsman Service (FOS) session “International experience of out-of-court protection of financial services consumers” within the 11th St. Petersburg International Legal Forum. He outlined the categories of disputes between investors and brokers that may fall within the competence of the Financial Ombudsman.
“Questions arise as to what risks a retail investor should be protected from in an out-of-court dispute resolution procedure. Certainly not from investment risks. There are the risks of the weaker party, the client. They are, in fact, no different from the risks in a consumer’s relationship with credit institutions. For example, unilateral change of contract terms, non-fulfilment of contract terms, mis-selling and a number of other things that Financial Ombudsmen come across in their practice in full measure, when considering disputes on investment life insurance,” the Financial Ombudsman said.
He said discussions were underway with the Bank of Russia on how to launch a “pilot” project for the FOS to handle disputes between brokers and their retail investor clients. “We are looking at possibilities of how to pilot this subject, including on the platform of the Association for the Development of Financial Literacy. The Association is operating within the framework of a special expert working group,” the Financial Ombudsman said.
During the four years of operation of the institution of the Financial Ombudsman Service, a full-fledged infrastructure and dispute resolution procedure have been established. “Everyone is aware that the process is fine-tuned from the moment of an appeal is filed to the moment a resolution is issued. And in this sense, it seems feasible to transfer disputes in this category to the institution of the FOS for consideration. The question is how to fine-tune this process in general with minimal losses and take all the relevant decisions,” Viktor Klimov added.
