First ever court ruling on forgery of FOS certificate issued

The Stavropol Territory Magistrates’ Court issued Russia’s first ruling in a criminal case on the fact of providing a forged Financial Ombudsman’s decision certificate to the insurance organisation.

The verdict was handed down under Part 1 of Article 159.5 of the Russian Criminal Code (insurance fraud), and the perpetrator, according to the Financial Ombudsman Service (FOS), was fined. The criminal case was initiated in September 2020 by an interrogator of the Investigation Department of the Ministry of Internal Affairs of Russia for the city of Essentuki on an application from the Ombudsman for financial services consumers support Service (OFSC) in order to bring to criminal liability the persons who forged and assigned the fake Financial Ombudsman’s decision certificate.

At the beginning of 2020, the OFSC discovered the fact of forging the Financial Ombudsman’s decision which had not been actually made. Moreover, the applicant whose details were included in the forged document had not contacted the FOS. The beneficiary’s representative directed the non-existent Financial Ombudsman’s decision to the insurance company in order to recover the CMTPL insurance claim that the Financial Ombudsman had allegedly decided to collect.

The insurance fraud problem has for a number of years been of current importance in the insurance market and with the advent of the institution of out-of-court dispute resolution, unscrupulous individuals have invented new ways to enrich themselves unlawfully. This case is not the only ascertained fact of fraud with fake Financial Ombudsman’s decisions. The Financial Ombudsman Service has already submitted applications to law enforcement authorities in similar cases.

It should be mentioned that financial institutions interact with the Financial Ombudsman Service only in electronic format. A Financial Ombudsman’s decision shall be signed with the Financial Ombudsman’s enhanced qualified electronic signature and communicated to the financial institution within one day from the date of its adoption exclusively through the Personal Account maintained by the OFSC. No other channels are used for communicating the Financial Ombudsman’s decision to financial institutions.

Currently, the Russian State Duma is considering a draft law, the adoption of which will allow delivery of the FOS certificates to the Federal Bailiffs’ Service of Russia exclusively in electronic format signed by the Financial Ombudsman’s enhanced qualified electronic signature. The adoption of these amendments and their entry into force is sure to eliminate paperwork in this area and thus become the main tool in the fight against fraud in this area.