Dispute settlement between consumers and financial service providers
The Bank of Lithuania receives increasingly more applications from residents who, after having suffered from fraudulent investment offers, seek to recover their lost funds.
Defending our rights is always welcome, yet in many cases the subject of such complaints is the payment service provider that has opened the beneficiary’s account, and it is the former that is usually requested to pay damages. However, the Bank of Lithuania is not authorised to settle disputes that do not arise from contractual relations.
Consumers should note that the Bank of Lithuania is responsible for the out-of-court settlement of disputes between consumers and financial market participants, which only arise from the provision of financial services. The Bank of Lithuania does not investigate cases where the parties are not bound by any contractual relations and where there is no intention to establish such relations, or where the financial market participant fails to provide financial services to the applicant on any other grounds. For example, the Bank of Lithuania could settle a dispute where a payment service provider fails to authorise or properly execute payment transactions under a contractual agreement.
In cases where a consumer submits an application to investigate whether certain actions of the beneficiary’s payment service provider comply with the established legal requirements, there are no contractual relations between the consumer and the payment service provider. Such civil disputes should be settled in court, while any fraudulent activities should be notified to law enforcement authorities.
Three rules of prudence for retail investors:
1. Do not invest in products you do not fully understand. By neglecting this advice, you not only risk losing your savings, but also going into debt.
2. Check out whether the institution offering investment services holds an appropriate licence and is authorised to provide these services in Lithuania. You can do this on the Bank of Lithuania website.
3. Avoid proposals promising ‘easy money’ and ‘no risk’.