Public Organization Financial Stability, which from the time of its foundation have been promoting the idea of formation of the institution of financial ombudsman in Ukraine, welcomes a wide expert discussion of the concept of transformation of the financial market of Ukraine, which is meant to resolve conflicts in the financial market.
Is the institution of financial ombudsman necessary?
Ruslan Demchak, the people’s deputy of Ukraine, Deputy Chairman of the Committee of the SCU on issues of financial policy and banking activity, about establishment of the institution of financial ombudsman in Ukraine:
The comprehensive program of the financial sector development for the years 2015-2020, which was approved by the National Council for Reforms, suggests initiation of establishment of the institution of financial ombudsman in Ukraine.
The problem of protection of rights of consumers of financial services in Ukraine is not newly arisen one, but the approach to establishment of the financial ombudsman institution has always been faltering.
For instance, The League of Insurance Organizations of Ukraine multiply advanced the initiative of establishing a position of insurance ombudsman. The Arbitration Court has been performing its activities at the Ukrainian Banks Association quite a time.
Eventually, today there are no institutions occupying with pre-trial settlement of disputes between financial institutions and consumers in Ukraine, although they are in place in many other countries of the world.
For instance, in such countries as Armenia, Australia, UK, Malaysia, the Netherlands, and Finland financial ombudsman is a single institution responsible for the entire financial sector, while in Belgium, Canada, Greece, Italy, Kazakhstan, New Zealand, Poland and Switzerland there are separate authorities for one or more segments of the financial market. In Denmark and Sweden ombudsman is represented by the Consumers Rights Protection Committee, in Malta and Spain it exists in the form of Complaints Department as a part of the financial regulator. In Latvia and Lithuania it is a part of the state authority responsible for consumer rights protection.
The major goal of establishing the institution of financial ombudsman in Ukraine is implementation of the principles set by G20 and in EU Directives, which will facilitate the process of integration to international networks of financial ombudsmen.
In Ukraine all disputes between consumers and financial institutions are considered by courts, and in specific cases only they can be submitted to regulators.
At that, the efficiency of such counteraction is quite low. As a result, trust to courts in 2015 was 5%. Courts demonstrate their inefficiency and corruption, they drag cases as long as possible.
By the way, in the EU over 50 approaches to off-court dispute settlement in the field of financial services are implemented successfully.
The new institution shall be unprejudiced, independent and it shall help in amicable settlement of disputes without referring to court. It shall decrease the load on courts and regulators. In 2014 over 36 thousand individuals submitted their complaints, mostly to the NBU – 25,262 complaints, to the NCSRFSM – 9,645 complaints, and to the NSSMC – 1,128 complaints.
The new institution will allow creating a “single window” for complaints, the procedure of dispute resolution will not exceed 3 months. This institution will have competence over the entire financial sector and thus it will generalize law enforcement practice and ensure complete work cycle.
I believe it expedient to start discussing the Concept of establishing the institution of financial ombudsman in Ukraine and support development of a draft Law “On financial ombudsman”.
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