February 9, 2024
What can the client do if the bank does not fulfill its promises?

Probably everyone has at least once encountered the purchase of defective goods or poor-quality services, which is why it is not a secret for anyone how exactly to solve such situations and where to turn.

Most likely, you either returned a low-quality product to the store or saw a dissatisfied couple standing with a receipt and trying to return the purchased product, while the seller examined it and tried to find at least some defect so as not to make a return. If the service or work you ordered was performed poorly, or all the terms of the technical specifications were not met, then you will most likely demand compensation or expect correction of inaccuracies. In the extreme case, you will restore the violated rights using other possible methods which are enshrined in the legislation on the protection of consumer rights.

However, what mechanisms exist to protect your rights if the bank or financial institution does not fulfills agreements? Let's consider further.

Let's imagine a situation when you agreed with a financial institution on the special conditions of your case and the bank confirmed that it can meet all your requirements, after the specified time you did not get the desired result, and the institution continues to charge you the cost of monthly service. What shall I do?

First of all, we would advise you to conduct all communication with the bank in writing, this will help to record all agreements and be exactly on the same page. Write down in detail which conditions are critical for your business and be sure to agree on the payment terms for opening an account. In addition to correspondence with the bank, we would advise you to fix all conditions in the contract as well.

Thus, if the financial institution does not fulfill its obligations, you will be able to refer to the terms of the contract or the agreements that were in the correspondence with the managers.

Based on our practice, most disagreements with financial institutions can and should be resolved through negotiations with managers.

This method really is the most effective, and here's why.

One of my acquaintances worked in the back office of a Ukrainian bank and one of her duties was to reverse transactions. And it seems that everything is fine, at first glance, but there is one "but": these transactions were for one kopeck, ten kopecks, hryvnia, that is, for insignificant amounts. Imagine that a hundred unsatisfied customers storm the bank branch every day, take up the managers' time, expressing dissatisfaction and demanding a penny back. It is much more profitable for the bank to return this penny, because it will save the time of its staff, and therefore the money of the bank itself.

And of course, we would advise you exactly this conflict resolution mechanism, as the fastest and most economical for all parties of the process. Firstly, the bank manager is already familiar with the details of your case, and secondly, he knows all the peculiarities of the financial institution from the inside, and thirdly, most likely, you have already communicated with him, so you have already established a certain interpersonal contact.

If it is not possible to reach the manager, and he ignores all previous agreements, you can try to establish a dialogue with the director of the institution, but the chances of getting an answer are even smaller than the chances of resolving the situation with the manager.

If all of the above does not work, you cannot come to an agreement with the manager, and the bank management does not respond, then you can always contact the regulatory body that issued the license. In each country, the functions of such a body are performed by a specific institution. For example, in Latvia,  the Financial and Capital Investment Commission of Latvia (Finanšu un kapitalia tirgus komisija vai FKTK), in Lithuania - the National Bank of Lithuania (Lietuvos bankas), in Sweden - the Financial Supervisory Service of Sweden (Finansinspektionen or FI) performs the functions of a financial regulator.

How exactly to determine which body in which country you need to write an appeal?

It all depends on which country's license your chosen institution has. In most cases, you can find this information in the public domain, it is enough to familiarize yourself with the footer of the website of such an institution or carefully read the terms of the contract.

Why should you contact the regulatory body?

The financial regulator is entrusted with a wide range of functions. For example, financial regulators are responsible for overseeing and regulating financial institutions, which includes establishing rules and standards that govern their activities. In addition, regulators are tasked with protecting the interests and rights of financial consumers. This includes providing information to customers about their rights and responsibilities, as well as providing access to complaint mechanisms. That is why, having mechanisms of influence on financial institutions, they are obliged to consider your complaint.

I tried everything but nothing works…

If you have tried all the above options, but there is still no solution, then you can always use the most radical way - to go to the court.

However, this method does not guarantee you a 100% result, and besides, it is expensive and quite time-consuming. In addition, in order to file a lawsuit, you must have a sufficient evidence base, all your agreements with the bank must be documented.

Given our experience, we would advise you to resolve all problematic situations with financial institutions out of court, as this will save your money and, as practice shows, it will save your time. In most cases, a financial institution is interested in preserving its own reputation and customer base and therefore will try to find an alternative that satisfies all parties.

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