Consumer disputes with banks, NPFs, pawnshops and CCCs to be resolved by the Financial Ombudsman as from 2021

As from 1 January 2021, a mandatory procedure for the out-of-court settlement of consumer disputes with credit institutions, credit consumer co-operatives, pawnshops and non-governmental pension funds comes into force in Russia.

The procedure established by Federal Law of June 4, 2018 No. 123-ФЗ «On the Ombudsman for the Rights of Consumers of Financial Services» provides that consumers of financial services of the mentioned financial institutions should appeal to the Financial Ombudsman Service (FOS) for protection of their violated rights before going to court.

The Financial Ombudsman considers the dispute if the service was provided to the consumer for purposes unrelated to business activities and if his property claims do not exceed RUB 500,000.

The Financial Ombudsman accepts and considers consumer complaints and appeals free of charge. Complaints from consumers are considered by the Financial Ombudsman in absentia, without summoning the parties. The Financial Ombudsman shall consider a complaint within 15 business days.

«Thus, as from 2021, clients of banks, non-state pension funds, credit consumer co-operatives and pawnshops have an opportunity to resolve disputes with financial institutions under a simplified procedure, via the Financial Ombudsman Service. However, to do so consumers should comply with the claims procedure, i.e. before appealing to the Financial Ombudsman they have to send a mandatory claim to the financial institution in question, stating the nature of their claim. And it is only if the consumer does not agree with the response of the financial institution or if it is not received within the prescribed statutory period, shall the consumer send a complaint to the FOS,» says Chief Financial Ombudsman Yuri Voronin.

«Given the FOS competence, given the fact that not all disputes fall under our jurisdiction, we expect that the total number of complaints against the listed financial institutions may be about 55,000 in annual terms, of which the majority, 43,000, will be complaints against banks,» continues Yuri Voronin.

According to the Chief Financial Ombudsman, the majority of disputes with banks will be connected with consideration of claims on the procedure of credit granting, fulfilment of obligations by the banks under consumer credit agreements. «This also includes disputes over deposits, bank transfers, and foreign currency transactions,» says the Chief Financial Ombudsman. «It is important to understand that the Financial Ombudsman Service only considers property claims of consumers to recover money from a financial institution. Under no condition will we consider disputes related to refusal to disburse a loan, refusal of banks to restructure debts, disputes related to issuance of loans using someone else’s ID, as the consideration of such disputes is not within the FOS competence in accordance with the law,» Mr. Voronin adds.

An appeal to the Financial Ombudsman Service may be submitted either electronically by filling in a standard complaint form in the consumer’s personal account on the FOS website or in writing to the address of the Ombudsman for financial services consumers support Service (OFSC). Based on the results of consideration of the complaint, the Financial Ombudsman makes a decision to satisfy fully or partially the consumer’s claims or to refuse to satisfy the consumer’s claims. The Financial Ombudsman’s decision is sent to the consumer within one working day.

The Financial Ombudsman’s decision comes into force 10 working days after it is signed by the Financial Ombudsman. If the financial institution has not fulfilled the decision within the deadline, the consumer may appeal to the FOS for a certificate, which is an enforcement document.