Number of complaints about misselling and hard selling of extra services drops: 2024 Q1 results

‘It is important that, over the first three months, the number of cases of misselling about which we received complaints from consumers declined by more than 70%. The number of complaints about hard selling of extra services associated with lending that the Bank of Russia received was nearly two times lower than in January—March 2023. These issues are in the focus of our attention’, said Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion of the Bank of Russia.

‘The law that came into force in January 2024 contributes to the decline in the number of cases of hard selling of extra services. The law provides for a range of measures to combat such practices,’ specified Mikhail Mamuta. ‘The number of complaints about misselling demonstrated a downward trend already in 2023. Among other reasons, this is owing to the fact that the Bank of Russia is empowered to stop sales if misselling continues after the market participant receives a binding order. Moreover, many major market participants have switched to customer-centric business models’.

The number of complaints about insurers and microfinance organisations (MFOs) was down by 40.7% and 35.1%, respectively, vs the same period of 2023.

In insurance, the 40.1% decrease was mostly driven by typical mass complaints about the adjustment of the bonus-malus coefficient (BMC). For a long period, a large portion of such complaints was drawn up by intermediaries for a fee. The set of measures taken by the Bank of Russia and market participants helped solve the issue. Since the end of 2024 Q1, a person filing a complaint has to pass the test to confirm that the complaint is filed by a human, not a robot. From the same period, insurers have started to more actively inform customers that the BMC can be checked for free and its value can be changed. 

As for MFOs, the number of complaints about hard selling of extra services, unacceptable terms of contracts concluded, cyber fraud and credit history records has fallen significantly.

The number of complaints against banks that the regulator received grew by almost 5%. The increase was mostly triggered by complaints about fraudulent activities (+45.4%). The number of complaints relating to the mortgage and consumer lending declined by 6.5% and 15.9%, respectively.

The number of complaints against collective investment market participants was up by more than a third. Such complaints include those about the management of unit investment funds, as well as concluding, amending and terminating contracts with non-governmental pension funds. The number of complaints relating to the securities market also trended upwards (+7.3%). Manipulation complaints contributed to the increase most significantly. A substantial number of such complaints was received from a single source.