The Supreme Court of Russia ruled that banks cannot add insurance costs to consumer loans without obtaining separate written consent from the borrower. The ruling, described by RIA Novosti as coming from the civil cases panel, sets a clear boundary on how optional services linked to loans must be presented and approved, underscoring a commitment to clearer borrower rights in everyday lending practice.
The decision emerged from a complaint by a resident of Yekaterinburg who obtained a 2 million ruble consumer loan and was offered a voluntary accident insurance policy valued at 156 thousand rubles. When the borrower sought to cancel the policy, the lending institution refused, illustrating a tension between loan underwriting and add on products. This case highlights widespread industry practices where insurance or other services can become embedded in loan terms, often without explicit enthusiasm or full awareness on the part of borrowers, raising questions about consent and fair dealing in financing arrangements. The coverage and its cost were presented as part of the overall loan package in a way that prompted scrutiny from the highest court, according to reports from RIA Novosti based on the civil panel’s decision.
The board emphasised that banks providing additional services must give borrowers a genuine choice to refuse or accept independently. Auto acceptance or lender driven approvals were deemed unacceptable. The ruling signals that additive services must be offered with an explicit, separate consent process, and that a borrower’s signature on standard terms does not remove responsibility from lenders to comply with consumer loan protections. This stance aims to curb practices where lenders leverage the promise of a loan to push unrelated charges, ensuring borrowers retain full control over any extras attached to the loan agreement.
The court clarified that the fact a consumer signs the individual terms of a loan does not erase potential violations of the Law on Consumer Loans. The decision reinforces the principle that consent must be clear and voluntary, not inferred from general assent or bundled with the primary loan agreement. By drawing this distinction, the court affirms that consumer protection provisions apply even when borrowers agree to customized terms, and that the act of signing does not serve as a shield for inappropriate add on practices or misrepresentations within the lending agreement.
In September, Duma deputy Sergei Kolunov stated that lawmakers are weighing limits on the number of consumer loans a person can hold, proposing that banks not approve more than two loans to a single borrower at any given time. The remarks reflect a broader policy debate about preventing over indebtedness and safeguarding consumer financial health by curbing aggressive loan origination. Whether such caps become law remains a subject of discussion, but the proposal signals a clear intent to tighten credit expansion practices and to push lenders toward more responsible lending standards and transparent disclosure of loan costs and services.
A legal professional familiar with these issues previously noted that scammers may exploit multiple loans tied to a single individual, emphasizing the need for stronger borrower verification and robust identity checks. The warning underscores the ongoing risk of fraud in consumer credit markets and the importance of authorities and banks maintaining rigorous verification processes. It also serves as a reminder for borrowers to scrutinize each loan document carefully, separating essential loan terms from optional add ons and ensuring each item has its own explicit consent trail. This vigilance helps prevent unauthorized charges and protects consumers from deceptive practices that can arise when multiple loans are processed in parallel.