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03 march 2023, 13:03
Chief Financial Ombudsman Yury Voronin was a speaker at the round table on “Practical Issues of Supervision and Regulation of Credit Institutions” organized by the Association of Russian Banks as part of the annual meeting between the Bank of Russia and credit institutions “Regulation of Commercial Banks by the Bank of Russia”.
In his speech Yury Voronin talked about the results of the Financial Ombudsman’s consideration of disputes between consumers of financial services and credit institutions in 2022, and also voiced proposals for improving procedures to protect the rights of consumers of banking services.
According to preliminary data, the Financial Ombudsman Service (FOS) received 153,168 appeals of consumers of financial services in 2022, the average amount of claims amounted to 215.8 thousand roubles. There were 13,761 appeals regarding credit institutions, of which 8257 (60%) were related to consumer lending.
The Financial Ombudsman considered 4889 appeals on the merits in respect of credit institutions, including 30.6% of the decisions to satisfy the claims, and 69.4% of the decisions to refuse to satisfy the consumers’ claims.
Yury Voronin voiced a number of unacceptable practices identified while considering appeals in 2022. These include the bank charging a disproportionate fee for joining the program of collective insurance, unilateral increase of the interest rate by the lending institution for independent conclusion of the security agreement by the borrower, non-recognition of the insurance contract as a security when the beneficiaries are a credit institution and the borrower.
“It should be noted that in 2022 we saw that some unacceptable practices which were identified in previous years are still used by lending institutions. This relates to the direct interaction between the Financial Ombudsman and the bank when considering appeals,” Yury Voronin went on. Thus, the Financial Ombudsman requests information, data, documents from the bank in order to consider all the circumstances, and the bank provides documents “at its own convenience”. For instance, according to the bank, the insurance contract was not entered into at the same time as the loan agreement, so the bank does not consider it necessary to provide a loan application because of its alleged irrelevance to the dispute.
Financial Ombudsmen have also encountered situations where documents are provided in the wrong wording, or links are sent not to the documents proper, but to the official website.
Yury Voronin also voiced proposals to improve the protection of the rights of consumers of credit institution services.
