The FOS Council examined the annual report on the Financial Ombudsmen’s activities in 2020

The FOS Council, which, in accordance with the law, includes, among others, representatives of the Russian Government, the Bank of Russia, and self-regulatory organisations on the financial market, positively assessed the Chief Financial Ombudsman’s annual report on the Financial Ombudsmen’s activities in 2020. The Council meeting was held on 3 March 2021.

According to Chief Financial Ombudsman Yury Voronin, Council members praised the activities of the institution in 2020 and pointed out its effectiveness.

«The specificity of last year’s work was the fact that we urgently had to shift the institution’s activities to a remote mode in the conditions of pandemic and restrictive measures. Despite these circumstances, not a single day was suspended in the process of considering appeals from consumers of financial services and, moreover, compared to 2019, the average time for considering appeals was significantly reduced,» Yury Voronin says.

Financial Ombudsmen dealt with appeals from consumers of insurance and microfinance institutions in 2020. The Financial Ombudsman Service (FOS) received 187,386 appeals from consumers during the reporting period. Claims were made against 137 insurance companies and 102 microfinance institutions.

The average number of appeals per day was 756, which is 147 appeals (24.1%) more than the average number of appeals received in 2019. The average number of consumer claims in 2020 was RUB 207,868 and compared to 2019, the value of the indicator decreased by 1.3% from RUB 210,614.

The overwhelming number of claims was for disputes under CMTPL insurance contracts – 155,440 (83%) of the claims. The largest number of claims under other types of insurance related to life and accident and health insurance was 18,633 (9.9%). The Financial ombudsmen received 834 appeals concerning disputes with microfinance institutions, and 186 of them were accepted for consideration.

As a result of review of appeals in the reporting period, the Financial Ombudsmen adopted 114,907 decisions, from which 98,798 decisions were made to satisfy fully or partially or deny the claims of consumers (on the merits of the dispute) and 16,109 decisions were made to terminate the consideration of the appeal.

In 43,330 cases consumer appeals were not accepted in the reporting period as they were not subject to review by the Financial Ombudsman. «The main reason for refusal of consideration was non-compliance of consumers with the mandatory complaint procedure – a consumer who has a claim against a financial institution is not aware that before applying to the Financial Ombudsman he/she has to apply to the financial institution. The Financial Ombudsman Service is constantly educating consumers of financial services, but I consider it expedient and very important to inform consumers directly by financial companies,» the Chief Financial Ombudsman continued. However, last year’s positive dynamic gradually began to appear in this indicator. The share of appeals not accepted for review was 23.1% in 2020 compared to 34.6% in 2019.

The Federal Law «On the Ombudsman for the Rights of Consumers of Financial Services» provides for a short timeframe for considering consumer appeals. In 2020, all appeals were processed by the FOS exclusively within the time limits stipulated by law. At the same time, the average time for considering consumer appeals, taking into account the suspension of consideration of the dispute for independent expertise, decreased from 20 days to 16 days compared to 2019.

Part of the decisions made by the financial ombudsmen in 2020 were appealed against in court by financial companies. Thus, financial institutions appealed against 14,412 (33.7%) out of 42,728 decisions on satisfaction of consumer claims. In this connection 14,270 Financial Ombudsmen’s decisions have been suspended as of February 10, 2021. Out of 7,322 decisions made by the court as of 10.02.2020, only in 268 cases has the Financial Ombudsmen’s decision been revoked. At the same time, a few of these court decisions are currently being reviewed by courts of appeal on cassation appeals from the FOS. In 3,337 cases the court rejected the claim of the financial institution and in 3,529 cases the Financial Ombudsmen’s decision was modified by the court due to reduction of the amount of the penalty.

In accordance with the requirements set out in Article 13 of the Federal Law «On the Ombudsman for the Rights of Consumers of Financial Services», the Financial Ombudsman Service will publish a report on its website by 1 June 2021 on the activities in 2020, which will include information on appeals made by citizens in relation to each financial institution.