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The Financial Ombudsman Service of the Russian Federation
The Financial Ombudsman Service of the Russian Federation
Overview
Established	2018
State	Russian Federation
Headquarters	Moscow Staromonetniy 3
Website	finombudsman.ru

The Financial Ombudsman Service of the Russian Federation

The Financial Ombudsman Service of the Russian Federation was created for out-of-court resolution of disputes between consumers of financial services and financial institutions.

The Financial Ombudsman Service of the Russian Federation (FOS)

Under most foreign jurisdictions, the institution of a financial commissioner (or ombudsman) is an independent scheme for resolving disputes between clients and financial institutions providing them with their services .

The decision to establish the financial ombudsman scheme in the Russian Federation was taken in 2018 when a special law was issued. The Federal Law of June 4, 2018 No. 123-ФЗ “On the Ombudsman for the Rights of Consumers of Financial Services” (hereinafter referred to as the Law) establishes the legal status of the Financial Ombudsman Service (FOS), the procedure for its activities, regulates the procedure for consideration of citizens’ complaints and other legal relations .

The FOS, in accordance with the Law , considers consumer claims in relation to services provided by credit institutions, insurance organizations, microfinance institutions, credit consumer cooperatives, pawnshops and non-state pension funds. Information on the timing of the Law’s entry into force with regard to financial institutions obliged to interact with the FOS is indicated in Section 3 of Article 12. In addition, other financial institutions can voluntarily join the FOS.

The Financial Ombudsman Service structure

• The FOS consists of :
• Chief Financial Ombudsman and ombudsmen for financial services;
• the FOS Council;
• the Ombudsman for financial services consumers support Service (OFSC);
• the FOS Expert Council.

The Ombudsman for financial services consumers support Service (OFSC)

The Ombudsman for financial services consumers support Service (OFSC) is an autonomous non-profit organization established by the Bank of Russia .

Olga Ivanovna Kraynova was appointed the head of the OFSC by the decision of the Chairman of the Bank of Russia .

The OFSC performs the following functions :

assists the Chief Financial Ombudsman and financial ombudsmen in the field of financial services in preparing complaints from consumers of financial services for the consideration;

verifies the compliance of complaints with the requirements of the Law and, in case of non-compliance of complaints with the specified requirements, informs the consumers of financial services who sent complaints and gives them necessary explanations;

collects, processes and stores complaints, provides information on these complaints using automated systems;

manages the fund for financing the FOS activities;

monitors the receipt of contributions from financial institutions to the fund for financing the FOS activities;

maintains a list of financial institutions organizing interaction with the FOS on a voluntary basis, and transmits information about financial institutions included in this list to the Bank of Russia.

Main Activities

The Financial Ombudsman Service of the Russian Federation performs out-of-court resolution of disputes between consumers of financial services and financial institutions that have provided them with a service.

The Financial Ombudsman Service considers complaints from citizens only in relation to financial institutions that interact with the FOS. Interaction is carried out both on a mandatory and voluntary basis .

Dates of the beginning of mandatory interaction of financial institutions with the FOS:

since June 1, 2019, the FOS has been considering consumer complaints in relation to insurance organizations that carry out activities in Compulsory Motor Liability insurance, Voluntary Third Party Liability insurance and insurance of land vehicles (except for railway);

since November 28, 2019, the FOS has been considering consumer complaints in relation to all insurance organizations (except for organizations that carry out compulsory health insurance exclusively);

since January 1, 2020, the FOS has been considering consumer complaints in relation to all microfinance institutions;

since January 1, 2021, the FOS has been considering consumer complaints in relation to credit institutions, pawnshops, credit consumer cooperatives and non-state pension funds.

Performance results

In 2019, the FOS Office Support Service received 91,359 complaints [35], of which:

70,267 complaints (77%) were sent by consumers through the applicant’s personal account on the FOS website;

21,092 complaints (23%) were delivered by hand or by the Russian Post.

On average, the OFSC received 609 applications per day in 2019, and the average size of applicants’ claims in 2019 was 210,614 rubles [35] [36].

In 2019, the FOS accepted 47,655 complaints for consideration. Based on the results of consideration of complaints by the FOS, 37,428 decisions were made, 10,227 complaints were in the process of consideration as at the end of 2019 [37].

Of the 37,428 decisions made by the FOS in 2019, 30,909 (82.6%) decisions were made on full or partial satisfaction of the applicants’ claims or on refusal to satisfy them (on the merits of the dispute) and 6,519 (17.4%) decisions on the termination of consideration of the complaint [37].

At the moment, consumers of insurance companies' services, as well as consumers of microfinance organizations' services, can apply to the Financial Ombudsman. From 01.01.2021, the Financial Ombudsman will consider consumer disputes with credit consumer cooperatives, pawn shops, credit organizations, and non-state pension funds.