Financial services have become an almost indispensable segment of the business and personal life of both companies and individuals, which is why protecting financial services users from unfair practices and unjust contractual terms is of crucial importance. When a financial services user enters into an agreement with a financial service provider, such as a loan agreement, lease agreement, deposit agreement, etc., they enter into a contractual relationship where the other party is generally considered the “stronger party.”
This imbalance is particularly evident when it comes to the content of these agreements, as they are often “adhesion contracts” (contracts of adhesion), where one party dictates the entire content of the agreement, and the other party only has the option to accept or reject the contract.
The Law on the Protection of Financial Services Users provides the key legal framework for protecting the rights and interests of individuals and companies using financial services. This law aims to ensure fair, transparent, and responsible practices in the financial sector while protecting users from potentially unfair or unjust actions by financial institutions.
Obligations of Financial Service Providers
Financial service providers have certain legal obligations toward users to ensure the protection of their rights. One of the primary goals of these regulations is to protect financial services users from hidden fees and unfair contractual clauses. This includes:
- Obligation to provide clear and accurate information: Financial institutions must provide users with clear, precise, and easily understandable information about financial products and services during the pre-contractual phase. This information must include interest rates, fees, and any other charges that may apply, as well as the conditions under which the service is available and the risks associated with using the service or product.
- Obligation to assess users’ ability to take on obligations: Before offering a loan or any other financial product, the financial service provider must assess the user’s ability to meet their obligations. This process is known as the “ability-to-borrow test” and includes evaluating the user’s creditworthiness based on income, existing debts, and other relevant factors.
- Obligation to provide information to users free of charge: Financial institutions are required to assist users in understanding their contractual obligations and resolving any potential issues or disputes that may arise during the course of the financial relationship. This includes providing additional explanations regarding financial products and services, as well as the rights the user has in relation to the institution.
- Guidance on rights and obligations in case of disputes: The financial service provider must clearly inform users about their right to file a complaint in the event of a dispute.
Supervision of Financial Service Providers
The National Bank of Serbia supervises the work of financial service providers, except for providers of financial contracts, in accordance with the law governing the National Bank of Serbia, as well as laws governing banks, leasing providers, insurance companies, and pension fund management companies.
The Ministry responsible for consumer protection supervises providers of financial contracts, in accordance with the law governing consumer protection.
Rights of Financial Services Users
- Right to File a Complaint
A financial services user has the right to file a complaint in writing with the financial service provider if they believe the provider is not adhering to the provisions of the Law on the Protection of Financial Services Users or other relevant laws and regulations, including unfair business practices or obligations under the contract. Users have the right to file a complaint within three years from the moment their rights or legal interests have been violated.
The financial service provider is obligated to provide a clear and understandable response to the complaint within 15 days of receiving it. If the response is unsatisfactory, the user can escalate the complaint to the National Bank of Serbia. - Right to File a Complaint with the National Bank of Serbia
If the user is dissatisfied with the response to their complaint or if no response is provided within the specified time, they can submit a complaint to the National Bank of Serbia. The complaint can be filed within six months from receiving the response or the expiration of the decision deadline. The National Bank of Serbia will require the financial service provider to respond to the complaint within a set time frame and may impose fines if the provider fails to do so. - Out-of-Court Dispute Resolution
If the user is dissatisfied with the response or does not receive a timely response, the dispute can be resolved through an out-of-court mediation process. Once mediation is initiated, the user cannot file a complaint unless the mediation process ends in suspension or withdrawal. The mediation process is confidential, expedited, and free of charge if conducted by the National Bank of Serbia. - Measures to Correct Irregularities
If the financial service provider fails to comply with legal regulations, business practices, or contractual obligations, the National Bank of Serbia may issue a decision requiring the provider to correct the identified irregularities. If the provider fails to address the irregularities within the given timeframe, the National Bank of Serbia can impose further fines. - Right to Judicial Protection
The initiation of mediation does not preclude the user from seeking judicial protection. The user retains the right to take their case to court, where they can protect their interests before the competent court.
Why Do I Need a Lawyer?
Using financial services today is inevitable, whether it involves taking out a loan, opening a savings account, purchasing insurance, or investing in financial products. The protection of financial services users is more important than ever, especially when there is a risk of unfair contractual terms. However, the financial services market can be complex and sometimes confusing for users, increasing the risk of unfair practices, fraud, misunderstandings, and violations of user rights. In such an environment, hiring a lawyer who specializes in the protection of financial services users can be a key decision to ensure clients’ rights are protected, minimize risks, and maximize the benefits of financial products.
Legal Services We Offer:
- Participation in negotiations and interpreting financial contracts (participating in negotiations on the terms of financial agreements on behalf of clients to ensure that all terms are fair, transparent, and comply with the Law on the Protection of Financial Services Users).
- Advice on financial products, including providing guidance on clients’ rights related to various financial products (loans, savings accounts, insurance, investments, etc.).
- Filing complaints and grievances with the National Bank of Serbia in cases of observed negligence or illegal practices by financial institutions.
- Representation in dispute resolution proceedings. If a dispute with a financial institution cannot be resolved amicably, we file lawsuits to protect clients’ rights.
Frequently Asked Questions
If the bank unilaterally raises the interest rate, fees, or other costs without your consent or proper notice, you have the right to file a complaint with the bank within three years of the change. The bank is obligated to respond to the complaint within 15 days. If no response is received or if the response is unsatisfactory, you can file a complaint with the National Bank of Serbia.
Check all items in the contract and compare them with the amounts charged. If there is a discrepancy, request clarification from the bank or leasing company. If no clear explanation is provided or hidden charges are found, you can file a complaint with the financial institution and later escalate it to the National Bank of Serbia.
If the financial institution does not respond to your complaint within 15 days, or if their response is unsatisfactory, you have the right to file a complaint with the National Bank of Serbia. If the issue is not resolved through this process, you can take the matter to court, and in such cases, it is advisable to consult a lawyer specializing in the protection of financial services users to maximize your chances of success.