The press service of Rospotrebnadzor socialbites.ca explained that banks, as a rule, violate four fundamental consumer rights – the right to free choice, security of the service, necessary and reliable information and quality of service. As clarified in Chapter, banks may not implement additional services, refuse service and do not ensure the protection of personal data without the consent of the borrower. In addition, financial institutions cannot provide information and documents to the consumer about the consumer characteristics of the financial product, and cannot mislead him. Finally, – do not provide documents, do not violate the terms of service provision.
Unilateral Waivers and Commissions
Often, banks violate the rights of consumers under the terms of the loan agreement. Representatives of Rospotrebnadzor listed four main such conditions.
The first is the right of the bank to terminate the loan agreement unilaterally without the reasons stipulated in the current legislation. The second condition is the predetermined consent of the borrower to purchase additional paid services (insurance services) or commission. Fees may be charged for printing money from the bank teller, withdrawing money from ATM, installments to repay the loan.
The third is the fee for informing the consumer about transactions made using the card, using SMS messages, push messages or a clause on the performance of additional services without the consent of the debtor (legal, medical services, providing roadside assistance) for a fee. . The fourth condition is the possibility of making payments under the contract only by bank transfer or the assignment of rights (claims) under the loan contract without the consent of the borrower.
Nikita Suklin, a lawyer at the Yukov & Partners Bar Association, stated that 6,000 complaints to Rospotrebnadzor are quite a high number, pointing to problems in the consumer credit field. At the same time, these numbers may not reflect the true scale of the violations: some consumers are likely not to react to these abuses at all and simply “endure” them, he added.
The press service of the Central Bank of the Russian Federation told socialbites.ca that Russians have registered a slight increase in complaints about the introduction of additional services or excessive commissions when granting loans. This can be expressed in the predetermined consent of the borrower for additional services disclosed in the Central Bank of Russia. This is against the background of a general decline in the number of customer complaints against banks. In the first half of 2023, the regulator received 80.3 thousand complaints against banks, which was 13.5% less than the previous year.
Galaktion Kuchava, head of the Popular Front’s regional bloc of the “For the Rights of Borrowers” project, noted that the banks “use their privileged position as an economically strong side”. Banks understand that the consumer is interested in getting a loan and are ready to accept any conditions to get it.
“If a financial institution unilaterally refuses a loan agreement (in this case, the customer must return the entire debt on the date of termination of the contract – socialbites.ca), the fundamental right of the consumer is violated – the legal certainty of their position (“Pacta sunt servanda” – agreements must be respected). If the bank refuses, the client loses the opportunity to predict his future financial situation. It seems that the bank can interfere with their plans at any time, ”said Suklin.
Fortune teller services and “horse” interest
Borrower’s predetermined consent to certain services often arises because, unlike the legal prohibition of automatic marking of consent in the contract, some banks have gone the opposite direction: There is only a column in the contract form to mark the dispute, said Master of Laws, Associate PRUE Public and municipal finance Department Professor. G.V. Plekhanova Mary Valishvili. At the same time, she added that the collection of various commissions constitutes an important part of the incomes of the banks, so they do not refuse this.
Timur Aitov, head of the financial security commission of the council of the Russian Chamber of Commerce and Industry, considers the imposition of additional services in lending as the main violation of the rights of Russians. He gave an example of such an application. The bank gives the client a loan at a low interest rate – conditionally 10% per annum. However, it also requires an insurance contract that costs 30% of the loan amount. If the client does not enter into an insurance contract, the loan is offered at a “horse” interest rate of 25% per annum. Or the bank may not give uninsured loans at all. As a result, the client is often forced to sign a “voluntary” insurance contract.
According to Kuchava, a manager can also impose unnecessary security labels when applying for a loan, applying to a consumer, insurance against useless fraud, and even the services of astrologers with fortune-tellers. He stressed that the list is endless, and that the types and methods of imposing these services sometimes lead to stupefaction.
The cost of additional services can be 100 thousand rubles,
Said the head of the interregional society for the protection of consumer rights “Consumers Union” Alexander Tishchenko.
Suklin said that under current law, banks are required to inform the customer about additional services and coordinate them accordingly. It is also illegal for the lawyer to determine the only possible form of payment: this is a blatant breach of the debtor’s privacy, which incurs additional costs on his behalf, the lawyer added.
hacking lives for the borrower
Under current “Consumer credit” law, insurance and other additional services may be waived. Within 14 calendar days from the date the optional insurance contract is concluded (the so-called “holding period”), you can request to terminate the contract and return the money. The bank is not entitled to change the interest of the loan after the conclusion of the contract.
Borrowers whose rights have been violated must file a complaint with the Central Bank or file a lawsuit in court. You can also contact the financial ombudsman or Rospotrebnadzor.
The Central Bank noted that they are implementing supervisory response measures while uncovering the realities of imposing additional services. Also, from January 24, 2024, a law comes into force that extends the cooling-off period from 14 days to 30 days, during which the borrower can refund money for additional services. The regulator believes that, along with the bank’s obligation to notify a person about this, this largely detracts from the imposition of additional services in the economic sense. The Central Bank also announced that since 2021, a law is also in force, which prohibits the assignment of rights (claims) under a loan or loan agreement without the consent of the borrower. The Central Bank also applies supervisory intervention measures for these violations.
Kuchava said banks will have to make a separate agreement for all additional services and, in general, the ability to add anything extra to the loan will become more difficult once the law is passed. If the loan is not urgently needed, it is better to wait for this rule to come into effect, he advised.
Kucheva noted that in order to confirm the facts of violation or abuse of rights, the client must have a minimum of evidence, copies of documents, photographs, audio and video recordings. He said that in order to prevent violations of rights, the consumer should first learn the documents and conditions regarding the proposed loan calmly and without haste.
“If the client realizes that it is not comfortable for him to do this in the presence of an employee at the bank, he has the right to take all the documents with him and meet them in a more relaxed and comfortable atmosphere. The borrower needs to remember that their rights are protected by the current legislation and tell this to the bank employees without fear and embarrassment,” he said.
Kuchava explained that when a bank employee tried to impose a service, everything that happened should be recorded and complaints should be sent to the supervisory authorities.
“Well, if you really don’t want to deal with collecting and dissecting evidence, you can always choose a bank with more favorable terms. This can be done by financial supermarkets and aggregators of the best offers. But even here you must be careful – you should not take the first offer that seems profitable, ”said the expert.
Alexey Tarapovsky, the founder of Anderida Financial Group, believes that only every 10th bank employee carefully talks about all the terms of the loan agreement, and only 20% of customers know all the clauses of the contract before signing the contract. The expert reminded that the signed contract means an agreement with all its requirements.