Bank of Russia to identify unfair sales practices: new regulatory tool
The Bank of Russia will identify and put on record the use of unfair practices as part of its inspections of financial institutions. Such unfair practices consist in, for example, selling one financial product as another one, misinforming a consumer or an investor about the size of fees or yields, providing customers with incomplete or untrue information about financial products and services on offer.
According to the amended Bank of Russia instruction registered by the Ministry of Justice, the controls are to cover those practices that cause damage to customers or jeopardise their legitimate interests.
Based on the results of inspections, the Bank of Russia will be able to take measures against financial institutions and prescribe them to correct their front office activities.
‘Apart from the analysis of consumer complaints and restoration of violated rights of particular applicants, the Bank of Russia’s conduct supervision has a range of measures to detect and prevent misconduct among market participants’, comments Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion. ‘The regulator now has an extra inspection tool in its kit to make its impact on financial institutions more precise and effective.’