The Financial Client Defense Authority must pay the costs and the affected party must return the money if the court agrees with the entity
The Government estimates that the judges will tend to support the rulings of the new body and that this will encourage banks to abide by its resolutions
The new one Independent Administrative Authority for the Defense of Financial Clientswhose creation has just received the starting gun from the Government, aspires to revolutionize the Spanish scheme of claims resolution against banks, investment firms and insurance companies, among other entities. To achieve this, the Executive has proposed that its opinions be of mandatory compliance for said entities (but not for clients) up to 20,000 euros, not as is the case now with the claims services of the Bank of Spain, the CNMV and the General Directorate of Insurance. However, this does not guarantee that those affected will recover their money if the new body agrees with them. The entities may appeal the resolutions of the institution and the last word will have it National audience, which may oblige the customer to return the recovered amount.
The right to effective judicial protection, included in the Constitution, guarantees that entities can defend their interests in court. For this reason, the bill approved by the Council of Ministers grants the Chamber of the Contentious-administrative of the National High Court the competence to “know in a single instance” the means against binding resolutions issued by the Authority. This, however, also represents an improvement for financial customers, according to the Government.
On the one hand, because as the appeal will be against the Authority and not against the client, if the judge agrees with the entity, the one that will have to pay legal costs will be the new public organization. Only if it is the client who appeals the Authority’s decision (normally because he has not agreed with him), he could be ordered to pay the costs. But there is another more important factor: “It is unlikely that he court decide, with an unfavorable resolution by the Authority, to give the reason to entity“, say sources from the Ministry of Economy.
The same is considered applicable for non-binding resolutions of the body, those corresponding to amounts claimed in excess of 20,000 euros. If the Authority agrees with the client, but the entity does not accept return the money, the affected party may go to the ordinary justice and the Executive believes that the judges will tend to condemn the entity, after having had a previous pronouncement against the new body. “It will be a incentive so that the entities abide by the Authority’s resolutions, even if they don’t have to,” the sources defend.
The new body not only aspires to receive the claims who now appear before the three supervisors financial, but also those received by the entity customer service financial and courts. It is very relevant: the vast majority of complaints do not end up being presented to the supervisors (when their entity does not agree with them, customers are more likely to go to court or give up). In the last five years, for example, they have ended up in the Bank of Spain only around 5% of the cases in which the bank has not agreed with the customer. “Many times you don’t go to the supervisors because their decisions are not bindingbut as now they are going to be, they are going to go to the Authority and they are going to download to court. This will also be an incentive for them to resolve the cases in their own claims services, which will have to be consulted before the Authority,” the sources maintain.
East higher claims traffic expected explains why the limit for binding resolutions has been set at 20,000 euros. “You have to come to a Balance between solving the problem and offloading the courts, on the one hand, and maintaining the legal security. If we raise it a lot, the amount of claims that would come in could surpass any estimation. We want to control the flow well and calibrate it well”, explain the sources who, however, do not rule out change the amount during the legislative procedures of the coming months.
One of the aspects that the banks have criticized of the blueprint is having to finance the Authority with a fee of 250 euros per claim received. They argue that the administrative fees are due pay those interested: the clients, in this case. From the Government it is argued that the directive Europe of 2013 from which the new body emanates establishes that it must be free for customers and independent of the executivehence the sector must pay it through a fee whose amount is also open to changebut that, in any case, must allow the body not to depend on the State budget.
“You have to comply with the directive and solve the problem. banksIn addition, they are going to benefit a lot from the existence of this institution. They won’t have those anymore. huge bags of claims that are accumulating and that affect your reputation very negatively. They are working to remove that bad image, accepting many things that ten years ago they would not have accepted. The cost they are going to have may be lower than the cost they would have to assume if this way of discharging claims did not exist. All this process that we are setting up is going to help them solve their reputational problem. And that, for 250 euros per claim, It is a good business“, argue the sources.