The topic of finance is always relevant. Every year, financial institutions that provide services in the field of lending and insurance are opened all over the country: credit and insurance companies, microloans, pawnshops, and many others. They clearly indicate all the conditions for obtaining consumer and loan loans, insurance payments, deposits and securities. The client clearly knows where to turn in case of providing the necessary financial services, but many do not even have an idea how to solve the problems resulting from their provision. One of these problems is the violation of consumer rights in the provision of financial services. It is often encountered by people who enter into loan agreements.
How can I detect a violation of a consumer’s financial services?
In 2020, the Ukrainian Parliament decided to reformat the Law on Consumer Protection.
From now on, the NBU and the National Commission, which regulates the financial services market, have greater powers to monitor compliance with the basic rules for interaction between financial services entities. Regulators work in three areas:
- providing assistance in the event of a request from consumers of financial services;
- monitoring compliance with requirements for banking organizations;
- protection of consumer rights and control over the activities of banks.
Violations in the interaction between the bank and the borrower can occur at different stages: from the moment of signing the agreement to the stage of full repayment of the loan and payment of all interest.
The main violations include the following cases:
- incorrectly calculated penalty percentage for long-term loans;
- additional services included in the agreement that the consumer did not consent to;
- enabling unilateral conditions that violate consumer rights;
- bank changes to the terms of the agreement;
- collecting interest for providing credit services;
- collection of funds if they are not specified in the contract;
- the bank’s request for early fulfillment of the conditions specified under the agreement;
- the bank’s demand for early repayment of the loan body and interest on it, in the event of a change in the borrower’s financial condition;
- the bank’s change in interest on the loan at the time of the agreement’s validity;
- transfer of the contract to third-party companies with a further demand from them to repay the loan;
- failure to fulfill its obligations, both on the part of the bank and on the part of the borrower.
How should a consumer act in the event of a violation of their rights?
Protecting the rights of consumers of banking services consists of a whole range of actions that are aimed at protecting the consumer. Almost always, rights are violated due to financial and legal illiteracy of the consumer. If you add an item that doesn’t comply with the law, the consumer will skip it in most cases. When the borrower clearly declares to the bank that he knows all his rights and, in the event of financial inconsistencies, can defend them, any banking organizations understand that it is better to meet the need of such a client.
Since banks are not interested in the consumer bringing the case to court, most often all issues are resolved immediately on the spot. In almost all cases, the courts take the side of the borrower and satisfy their claim in full, which once again proves that the country has consumer protection. The bank almost always remains in a losing position. In addition, in the course of a court case, the bank may pay a certain percentage of monetary compensation, in case of satisfaction of the claim, or be temporarily deprived of the license to provide financial services. Regarding other laws, the Law: “On Protection of Rights” the percentage of satisfactory claims of consumers is extremely high, so banks try not to bring the case to court and resolve the conflict at the initial level.
In the event of a conflict at the first stage, the consumer must explain their claims or demands to the authorized persons of the bank, and then give the performers a written statement. It is advisable to request feedback from the bank in writing as well. This can be a statement of satisfaction of the requirements or a refusal to comply with them.
Who can help in case of violation of the consumer’s financial services?
In order to organize effective interaction and implementation of the consumer’s right to credit, a special agreement on cooperation was concluded between executive bodies and banks in the field of rights protection, according to which you can apply to the NBU if consumer protection in the banking sector is violated. If the consumer’s rights have been violated, then, of course, the first thing he should do is contact his bank, with which he concluded the contract. The request must be in writing with a clear complaint about certain points of the contract. In order to correctly state your complaint and plant the entire evidence base, in any case, you should contact a law firm, and you can also make an appeal or appeal the decision yourself.
If the bank of which you are a client has not received a clear response to your complaint and the question remains open, you should write an appeal to the NBU. Consumer protection in the banking sector is regulated only by the National Bank, which accepts complaints both in person and electronically. If you can’t appeal in person, please send an email to nbu@bank. gov. ua, or call the hotline number 0 800 505 240. At the time of quarantine, it is better to use remote mode communications.
The email should have the following format: full name, the essence of the stated issue or complaint. It is necessary to provide clear information with the possibility to attach copies of documents so that the NBU, based on it, can make a decision. If the commission decides that the NBU will not be able to become the competent authority to solve this problem, the client will be redirected to another body. The time required to process a complaint is usually up to 30 days.
Which organizations can I report in case of a violation?
If the conflict situation has not been resolved at the initial level, then the consumer of financial services should seek help from third parties in accordance with the established procedure. A large number of problems can be resolved in a pre-trial manner. In this case, the first step is to seek financial advice from legal and financial institutions. These can be:
- private companies;
- authorized state bodies;
- as well as public organizations that are ready to help.
Consumer protection in the banking system can be regulated by financial unions that operate both on a voluntary basis and are regulated by regulatory acts.
After receiving financial advice, you should go to the authorized bodies for resolving conflict situations. With them, the consumer discusses further actions related to filing a statement of claim in court and the correctness of its writing.
How do I write a complaint about a violation of financial services?
The consumer can write and file a complaint on their own, or they can ask for help from special organizations that represent the consumer’s rights in court. In the first case, the consumer collects all the materials on the case himself, as well as passes through all instances without third-party assistance. In the second case, at each stage of the legal process, all actions of the consumer are controlled by the authorized body.
If a decision is made to present the complaint independently, it will be necessary to specify the exact contact details of the applicant, fully state the claim statement and attach all necessary documents showing the interaction of the consumer and the organization providing the relevant banking services. Consumer rights protection is regulated by regulatory legal acts and the Law “On Protection of Rights”. The application is considered within two weeks from the date of its submission. The plaintiff receives a notification about the appointment of the first hearing and the exact date of his visit to the court.