Bank of Russia sees decline in misselling but rise in cyber fraud

In 2024, the Bank of Russia received a total of 338,000 complaints from financial consumers and investors. A decline was noted in complaints about the bundling of additional services and misselling, while issues related to cyber fraud and blocking of accounts and funds transfers saw an increase.

The reduction in complaints about banks promoting additional services with loans dropped by 45.2% due to conduct supervision measures implemented by the Bank of Russia. This decrease also led to fewer complaints in the consumer lending sector.

Complaints against microfinance organizations (MFOs) regarding unnecessary service sales fell by 2.1 times. There was also a significant drop in grievances about inaccurate credit history information and fraud, decreasing by 38.7% and 19.1%, respectively. Overall, MFO-related complaints decreased by 22.1% over the year.

Misselling cases more than halved following authorization granted to the Bank of Russia in 2023 to suspend sales not complying with informing rules.

Insurer-related complaints reduced by 30%, primarily due to changes in contesting procedures for the bonus-malus coefficient (BMC). Many past complaints involved verifying this coefficient, often facilitated by intermediaries for a fee despite individuals being able to do it themselves free on the National Insurance Information System website.

However, cyber fraud complaints against banks increased by 1.8 times as criminals devised new methods for stealing money. In response, regulators instructed banks to block bank cards and online banking access for those involved in money muling—cashing out stolen funds—and suspend suspicious transfers for two days. This action inadvertently led to a rise in applications concerning blocked funds transfers and accounts, which doubled at least partly because many such accounts were proven fraudulent.

"The good news of this year is that the number of complaints about hard selling and misselling continues to decrease, which means that credit institutions and MFOs are becoming more customer-oriented," said Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion at the Bank of Russia. "On the other hand, there is bad news as well, which is, of course, a growing number of complaints about fraud."

To combat these issues further starting March 1st, 2025 Russian citizens can place bans on concluding consumer loan agreements with banks or MFOs through their credit history on Public Services portal; from September 1st onwards similar services will be accessible via multi-purpose centers providing state/municipal services enabling people protection from fraudulent loans taken under false pretenses or influence thereof.

Mamuta emphasized: “This will allow people to protect themselves against a situation when a fraudster takes out a loan on their behalf or when they act under fraudsters’ influence.”