New procedure for the investigation of disputes between consumers and financial institutions provides wider possibilities for participants of the process

‘We expect that greater publicity in investigating disputes makes the process clearer and is beneficial for both parties, albeit requiring more responsible behaviour from both parties. On the one hand, this encourages financial institutions to more closely react to customer complaints and to investigate their disputes more responsibly. On the other hand, consumers, having acquainted themselves with the results of the settlement of the disputes that have already been handled, or in similar situations, have the stimulus to consider whether their claims are reasonable and what is to be expected from the settlement of the dispute,’ says Eglė Lukošienė, Head of the Financial Services and Dispute Settlement Division of the Supervision Service at the Bank of Lithuania.

The Bank of Lithuania has been addressing disputes between consumers and financial market participants out of court for over four years. According to the established procedure, where a consumer has claims over the services provided by a financial market participant, he should first apply to it and make clear the circumstances. Where efforts to reach an agreement fail, the consumer must apply to the financial market participant in writing, specifying the circumstances of the dispute and his claim. Where the response from the financial market participant does not satisfy the consumer, he has the right to apply to the Bank of Lithuania.

The Bank of Lithuania’s Rules on the Procedure for the Investigation of Disputes Between Consumers and Financial Market Participants Out of Court  establish this year a two times shorter term for a financial market participant to submit a reply to a consumer concerning services: it will have to be submitted within 14 days (previously it was 30 days). The time for a consumer to apply to the Bank of Lithuania, from the date of applying to a financial market participant, has now been set up longer by up to one year (3 months previously). The term for the investigation of a dispute is also now longer (90 days, previously it was 2 months); moreover, it will be able to extend it by 30 days where necessary (previously it was 2 months as well).

A new method for consumers to apply to the Bank of Lithuania concerning disputes — an electronic one — has been legalised: via the administrative and public services portal (http://www.lb.lt/gincai). Written and signed applications of consumers, sent by post or e-mail or handed over to the Bank of Lithuania, are still being accepted.

Disputes between consumers and financial market participants that were resolved in the Bank of Lithuania in 2015 in many cases ended in the implementation of recommendations of the Bank of Lithuania. 81.5 per cent of disputes resolved in favour of consumers were satisfied by insurers, banks and other financial market participants. 

‘While Bank of Lithuania decisions regarding disputes are recommendatory, the absolute majority of financial market participants acknowledge their weightiness and agree to satisfy them even if they are more beneficial for consumers. Nevertheless, residents should know that even though an insurer, bank or other institution disagrees to satisfy the Bank of Lithuania’s recommendations, the resident can apply to court regarding the same dispute,’ said Eglė Lukošienė.

In 2015, the Bank of Lithuania settled 474 applications over disputes, an increase of 4 per cent year on year. The major part (59%) of applications is related to the insurance sector. Nearly a third of total applications were disputes with banks. There were relatively few applications concerning disputes over the actions of other financial market participants — such applications account for 11 per cent.

Disagreement between insurance undertakings and their customers mainly occurred concerning Motor Third-party Liability compulsory insurance (31% of total applications regarding disputes with insurance undertakings). There was a similar number of consumer claims (20%) concerning Casco insurance and property insurance contracts (19%).

Customers of commercial banks mainly applied with a request to investigate disputes regarding housing credit agreements (31%). Applications related to account administration increased in number: last year, such claims accounted for 25 per cent of total disputes with banks (17 per cent in 2014). 

Disputes with other financial market participants accounted for 11 per cent of total disputes. Many of them — regarding consumer credit agreements.

In 54 cases the Bank of Lithuania made a decision to satisfy a customer claim fully or in part. In 50 cases a consumer and a service provider agreed peacefully.

New statistical information about the investigation of disputes between consumers and financial institutions in 2015 and the review (490.8 KB download icon)of disputes resolved by the Bank of Lithuania are published on the Bank of Lithuania website.