Meeting of the FOS Public Council takes place

At its meeting on September 10 the Financial Ombudsman Service (FOS) Council considered two issues related to improvement of the institution of out-of-court dispute resolution in the financial market.

On the first issue of the agenda the Financial Ombudsman Service came up with a proposal to form rankings of insurance companies dealing with CMTPL contracts. «The FOS has unique statistical data on the results of consideration of appeals from consumers of financial services. The availability of such an array of information will allow to create a unified standard on rules for ranking financial institutions and ensure the necessary frequency of publication of rankings», Chief Financial Ombudsman Yury Voronin emphasized.

The FOS presented to the members of the Public Council draft rules for ranking of insurance companies under CMTPL insurance contracts. «The publication of such rankings will strengthen the Service’s influence on the behaviour of financial institutions, will help consumers in making decisions about the purchase of financial services, and will contribute to the protection of the rights of consumers of insurance services», Yury Voronin elucidated.

The initiative was supported as a result of the discussion. Council members recommended that the Financial Ombudsman Service together with insurance companies discuss further approaches to the formation of ranking ratios and elaborate on the timing and order of publication of rankings.

Under the second item on the agenda of the meeting, the Financial Ombudsman Service initiated a discussion on approaches to the identification of consumers who send an appeal to the Financial Ombudsman.

The Federal Law «On the Ombudsman for the Rights of Consumers of Financial Services» stipulates that appeals to the Financial Ombudsman shall be sent by the consumer in person, except in cases of legal representation. If the consumer appeals in person, the Financial Ombudsman accepts and reviews the application free of charge. If the appeal is submitted by persons to whom the consumer’s right of claim against a financial institution has been assigned, the Financial Ombudsman shall consider the appeal for a fee (currently 15,000 roubles).

The practice of processing appeals revealed cases when third parties submit appeals under the guise of a consumer without paying the established fee. To avoid such situations, the Financial Ombudsman Service has organised a confirmation for consumer applications via an UIAS (Unified identification and authentication system) account since 1 August 2021.

The introduction of such a procedure has led to a significant increase in the number of paper-based appeals. For example, in August 2020, the share of such appeals was around 18 per cent and in August 2021 it reached 30 per cent. «That is, as soon as the identification of applicants to the Service was introduced, the previously stable share of paper applications began to grow, from which we conclude that third parties want to use this method and hide the fact that they are such,» Yury Voronin said.

He noted, however, that there is no goal of excluding third parties from the process of protecting the rights of consumers of financial services, but there is a need to develop ways for representatives to act within the law.

Having considered the problem, the FOS Public Council recommended that the Financial Ombudsman Service together with participants of the financial market discuss the problem of identification of consumers submitting applications to the FOS in hard copies. During the discussion it is necessary to determine additional ways of authentic identification with formation of the corresponding initiatives on changes and additions in normative-legal acts. This may include proposals to amend the law «On the Organization of State and Municipal Services» in terms of sending consumers’ appeals to the Financial Ombudsman through multifunctional centres for state and municipal services.