Rospotrebnadzor states UBRD commits numerous violations of customers’ rights
5 June 2014 (09:21)
June 5, 2014. Sverdlovsk Region division of Rospotrebnadzor got a query from customers of the Ural Bank for Reconstruction & Development (UBRD), who complained of violations of consumer rights. The bank charged its customers for some additional services without complying with the legal requirement that information should be provided as to the price of these services and as to the customers’ right to turn the offer of these services down. The total commission that one of the customers had to pay throughout his loan period amounted to more than 85,000 RUR, the agency’s press service reports.
The UBRD was ordered to stop violating consumers’ rights, yet the bank took the case to an arbitration court, although the court’s ruling was not in the bank’s favor.
Rospotrebnadzor’s experts determined that the bank had violated the legal requirements relating to providing customers with complete information about the price of its services, the total amount of money the borrowing party would have to pay on a loan, the pay-off schedule, and the calculation of the full cost of the loan, all of which is necessary in order to accept or decline the bank’s offer. The documents the customer was given did not contain any information relating to the price of the bank’s service package. Nor did the customer receive any calculations of the full cost of the loan.
Secondly, the bank did not give the customer information that would make it possible for him to choose whether to borrow the said commission in the form of a loan or whether to pay it in a different way. The bank simply added the commissions up to the loan without notifying the customer, so the latter was getting the impression that his loan was getting bigger. As a result, in addition to paying the commissions, the customer was also forced to pay a very tidy bit in terms of the interest charged upon these commissions.
Thirdly, the lending institution devised a unified agreement on the service package that was offered to the customer by default no matter what services were actually being rendered to the customer. Even if the borrowing party only applied for a loan, the bank wouldn’t issue it without a service package agreement with additional services. Under the current legislation, however, an agreement must only contain clauses on the services that are being actually offered to the customer and which the customer has consented to buying.
Finally, one more proviso in the additional agreement said that a customer wasn’t allowed to protect their rights through court without negotiating with the bank first, which actually imposes a limitation on the customers’ legally protected right to go to court without informing the bank first.
The UBRD was ordered to stop violating consumers’ rights, yet the bank took the case to an arbitration court, although the court’s ruling was not in the bank’s favor.
Rospotrebnadzor’s experts determined that the bank had violated the legal requirements relating to providing customers with complete information about the price of its services, the total amount of money the borrowing party would have to pay on a loan, the pay-off schedule, and the calculation of the full cost of the loan, all of which is necessary in order to accept or decline the bank’s offer. The documents the customer was given did not contain any information relating to the price of the bank’s service package. Nor did the customer receive any calculations of the full cost of the loan.
Secondly, the bank did not give the customer information that would make it possible for him to choose whether to borrow the said commission in the form of a loan or whether to pay it in a different way. The bank simply added the commissions up to the loan without notifying the customer, so the latter was getting the impression that his loan was getting bigger. As a result, in addition to paying the commissions, the customer was also forced to pay a very tidy bit in terms of the interest charged upon these commissions.
Thirdly, the lending institution devised a unified agreement on the service package that was offered to the customer by default no matter what services were actually being rendered to the customer. Even if the borrowing party only applied for a loan, the bank wouldn’t issue it without a service package agreement with additional services. Under the current legislation, however, an agreement must only contain clauses on the services that are being actually offered to the customer and which the customer has consented to buying.
Finally, one more proviso in the additional agreement said that a customer wasn’t allowed to protect their rights through court without negotiating with the bank first, which actually imposes a limitation on the customers’ legally protected right to go to court without informing the bank first.
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