The Financial Customer Ombudsman Authority

The Spanish state will create a new body to manage complaints between customers and providers of all kinds of financial products that will be financed by the entities in proportion to the complaints received.

The law was approved on 18 May 2023 by the Plenary of the Congreso de los Diputados with 186 votes in favour from PSOE, Unidas Podemos, ERC, PDeCat, Ciudadanos, PNB, EH, Bildu and Más País, 47 votes against from Vox and 95 abstentions from PP and Junts. The legislative initiative was referred to the Senate and is awaiting final approval.

The new supervisory authority will centralise the complaints services of the Banco de España, the Comisión Nacional del Mercado de Valores (CNMV) and the Dirección General de Seguros y Fondos de Pensiones, with the aim of “resolving complaints against breaches of the rules of conduct, good practices and financial uses or the abusive nature of contractual clauses”.

This new ombudsman for financial clients includes in its protective function “users of the entities and operators of the so-called Fintech sector, as well as the provision of crypto-asset services, in the terms envisaged in the future Regulation of the European Parliament and of the Council on Crypto-asset Markets”.

To prevent financial exclusion, the regulation guarantees basic bank accounts and offers special protection not only to the elderly but also to other vulnerable groups such as migrants or the disabled. In this sense, when complaints do not have a financial content, the body will be able to impose compensations in favour of customers for amounts between 100 and 2,000 euros.

Decisions will be binding

Citizens’ complaints will be free of charge and will have to be resolved within a maximum of three months, but, unlike the current regulation, the decisions of the supervisory authority in cases of conduct and abusive clauses will be binding, provided that the amounts involved are less than 20,000 euros. These decisions may be appealed before the civil courts, although the filing of a lawsuit will not have suspensive effects.

As until now, affected citizens will have to present their claim to the financial institution’s customer services department in the first instance, and if this is not favourably dealt with, they can turn to the “Autoridad de Defensa del Cliente Financiero”, which “may agree to return the amounts unduly charged by the financial institution, plus the legal interest”.

The new body will also be able to impose sanctions of between €500,000 and €2 million for non-compliance with binding resolutions. It will also be able to impose fines of up to €1 million on the directors of financial institutions responsible for the most serious cases of misconduct. These measures should help to prevent financial institutions from continuing to abuse the system to delay payments in favourable cases.

Financial entities will bear the cost of claims

The 250 euro fee per complaint that was intended to finance the new authority was finally not approved during the negotiations. Even so, claims will be free of charge and 40% of the cost of running the institution will be distributed proportionally according to the number of complaints from each institution, while the remaining 60% will be distributed proportionally according to the number of favourable rulings for complainants from each institution, thus penalising those with the worst results.

Even so, customers who make repeated complaints to banks within a year and without grounds may be fined if bad faith in making the complaints is observed. They will be fined between 50 and 250 euros, or up to 1,000 euros if there is a repeat offence. These fines can be appealed through administrative channels or in the courts.

The new fees and penalties should help to reduce bad practices by financial entities and prevent disputes between these companies and their customers from being as unbalanced as they are now. That said, it remains to be seen whether this funding will be sufficient to provide this body with the necessary means to fulfil its purpose and whether the amount of the fines will be sufficiently dissuasive to change the bad habits that characterise the banking sector.

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