Bank of Russia reports strong rise in complaints in Q4
In the fourth quarter of 2017, the Bank of Russia received as many as 33.9 thousand complaints against non-bank financial institutions. This is 18% more than in the prior quarter. There was also an 18% rise in the number of complaints against banks, which numbered 36.8 thousand in the fourth quarter; as a result, banks accounted for more than half of all complaints (52%).
Insurance companies featured in 35.4% of all Q4 complaints, microfinance organisations accounted for 5.8% and consumer credit cooperatives’(CCCs) share was 2.9%.
In 2017, the Bank of Russia received as many as 121.9 thousand complaints against non-bank financial institutions. This is 22% more than one year ago. Insurance companies accounted for 37% of total complaints. Issues related to OSAGO, the most sizeable problem area in insurance-related complaints, were expressed in 77.9 thousand complaints, 16% more compared to 2016. The key reason was consumer dissatisfaction over difficulties concluding electronic OSAGO contracts. Most such complaints were registered in 2017 Q1, at a time when the service had just become available. However, 2017 saw a significant drop in the number of issues related to non-provision of OSAGO (by 70% compared to 2016) and enforced services tied to an OSAGO contract (by 67%).
In 2017 Q2, non-governmental pension funds emerged as subjects of many more complaints. Consumers cited unauthorised transfers of pension savings from one NPF to another or holdbacks by the current insurer, as well as loss of investment income during transfer.
By the end of the second quarter, prompt regulatory action against several financial market players resulted in a 68% drop in the number of such complaints. The collective investment segment was responsible for 3.3% of all complaints addressed to the Bank of Russia.
Microfinance organisations saw a drop in the number of complaints by 2 percentage points against 2016: year-end data show they were the cause of 5.2% of total complaints filed with the Bank of Russia. Decline was most noticeable in complaints against high interest filed by those unable to meet their liabilities, testifying to the positive impact of a 2017 package of measures to reduce borrowers’ debt loads.
At the same time, there was a threefold rise in the number of complaints lodged against CCCs. This probably comes as a result of BoR supervisory action to combat a number of unscrupulous CCCs and protect shareholders’ rights.
Credit institutions gave cause for 122.3 thousand complaints, which is more than half (50.1%) of all complaints.
