The Financial Ombudsman Service Council reviewed the annual report on the financial ombudsmen’s activities in 2019

The FOS Council, which according to the law includes representatives of the Bank of Russia, the Government of Russia and self-regulatory financial organizations, approved the Chief Financial Ombudsman’s annual report on the activities of financial ombudsmen in 2019. Chief Financial Ombudsman Yuri Voronin told the press about the decisions of the Service Council, during an online meeting on May 18, when he made public the key points of the report.

He reminded that the Financial Ombudsman Service had received 91,359 consumer complaints in 2019, on average 609 complaints per day. The vast majority of complaints (87,038 or 95.3%) dealt with disputes under compulsory motor liability insurance contracts.

Financial ombudsmen made 37,428 decisions in 2019, as a result of reviewing complaints, of which 30,909 were made to satisfy, in full or in part, consumers’ claims or to refuse to satisfy them (on the merits of the dispute). Yuri Voronin drew particular attention to the period during which consumers’ complaints were being reviewed and financial ombudsmen were making decisions. ‘On average, it amounted to 20 working days, including the suspension of the dispute for an independent examination. As you know, the law provides for very short deadlines for considering consumers’ complaints, which is unique to the Russian law and order. In 2019, review of all complaints was made by the FOS exclusively within the deadlines prescribed by law,’ said Yuri Voronin.

He added that the FOS decisions in most cases were properly executed by insurance companies. As at April 1 of this year, a total of 1,123 certificates were issued to enforce the FOS decisions adopted in 2019. Of the 16,188 decisions made by the FOS last year in the consumers’ favour, 30% were challenged in court by financial institutions.

According to the results of reviewing claims of financial organizations on appealing against the FOS decisions as at 01.04.2020, 851 court decisions were made. In 219 cases, the court rejected claims of a financial organization, and only in 15 cases did the court revoke a FOS decision. ‘Such a low rate of revoked decisions – less than 2% – testifies to the fairness of those decisions that are made by financial ombudsmen,” says Yuri Voronin. At the same time, he added, insurers often dispute the amount of the forfeit in court, and in 612 cases the FOS decision was changed by the court due to a gap in the legal regulation that did not allow the financial ombudsman to reduce the penalty payable on the basis of Article 333 of the Civil Code of the Russian Federation. However, these FOS decisions are absolutely legal and reasonable, he added.

In turn, Head of the OFSC Olga Kraynova told the press that, at the previous meeting, the Service Council also approved the annual financial statements of the standalone non-profit organization “The Ombudsman for Financial Services Consumers Support Service” for 2019. She added that according to the audit report submitted to the Service Council, the annual financial statements reliably reflect the financial position of the OFSC as at December 31, 2019, as well as the intended use of funds and their proper movement for the period from October 16, 2018 to December 31, 2019.

Olga Kraynova told the press that during the quarantine in April and May, the FOS did not stop receiving and reviewing complaints from consumers of financial services. So, during the period from April 30 to May 11, the OFSC received 15,631 consumer complaints, and financial ombudsmen made 11,222 decisions. ‘This proves that even in an unfavourable epidemiological situation and under significant restrictions, the Financial Ombudsman Service is able to continue its activities effectively. Since March 27, more than 90 per cent of employees have been transferred to the remote work mode. Today, 99 per cent of employees work remotely. It was made possible by using the advantages and approaches that were previously implemented in building the IT infrastructure and organizing the work of the Financial Ombudsman Support Service, namely, a wide-area IT infrastructure, a technical support team and a user’s remote application management system for both the FOS employees and financial organizations and consumers. The use of the FOS main IT systems, including the call processing system, IP-telephony, file-sharing systems and other IT tools, is designed for the mobile workstations securely connected through a VPN. All the main processes, including the document flow between financial organizations and expert organizations, rely on a paperless office,’ she added.

You can read the Chief Financial Ombudsman’s annual report on the activities of financial ombudsmen in 2019 here (rus).