Thursday, November 10 2011 17:12

Financial ombudsman's institute gaining popularity among Armenian citizens


ArmInfo. ArmInfo's interview with Pirouz Sargsyan, financial mediator (financial ombudsperson) of Armenia

What is the impact of introduction of the financial ombudsman's institute on the financial system of Armenia? Has it increased the trust in the system?

Introduction of the financial ombudsman's institute has had a positive impact on the financial system of Armenia. Settlement of financial disputes between financial organizations and customers of financial services led to resolution of many system issues, legislative corrections and financial contracts. Through discussions with financial organizations, the financial ombudsman achieves changes in the contract terms and services not favorable to customers. Last year the financial mediator demanded that financial organizations (particularly pawn shops) provide written notification to customers before setting their pawn to sale (gold items). In fact, financial organizations now send written notification to their customers warning them of the repayment deadline and further sale of the pawn. It is one of the biggest achievements of the financial ombudsperson. Another our important task is to raise financial awareness of the population. For that purpose, we meet with students, pensioners and customers of financial organizations and implement a comprehensive educational project.

What factors hinder financial mediator's activity in Armenia?

Low level of financial mediation and public awareness are serious obstacles to our activity.

Do financial mediators enjoy public confidence?

The Financial Ombudsman's Office of Armenia has received over 1.6 thsd complaints since its start-up. It is almost a 100% growth. There are also cases when customers cast doubt on the fairness of the financial mediator's verdict, but many of them apply to our office again, which shows that the confidence in our activity is growing.

Can you say that public confidence in financial organizations has grown with introduction of the financial ombudman's institute?

I cannot say exactly, but low financial education and ignorance of the rules of operation with banks or other financial organizations is an essential factor of low confidence in financial organizations.

Have you received any complaints from financial organizations disputing your verdicts?

There were cases when a financial organization was categorically against the financial ombudsperson's decision, but no verdict of the financial mediator has been disputed in the court yet. I can say that the dialogue with financial organizations is a success so far. We will do our best to avoid tense relations with them and court disputes. When we make decisions acceptable to financial organizations, they change their approach to particular issues with readiness.

How many application-complaints has the Financial Ombudsman's Office received this year? What financial structures and what operations do people complain of most of all?

We received over 794 complaints for 10 months of 2011, with some 103 in the written form. 70% of total number of complaints was settled in favor of customers. Most complaints were against insurance companies (70% of total). Banks were on the second position and pawnshops on the third position. In particular, top three insurance line that were most complained of were MTPL, medical insurance and CASCO.

What is the total amount of compensations paid to customers? Who paid more: banks or insurance companies?

A total of 33.581 mln drams were paid for 10 months of 2011 as compensation, with 43% was the share of insurance companies, 33% - loan companies, 20% -banks and 3% pawn shops.

By Gayane Isahakyan

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