Bank of Russia and Rospodtrebnadzor remind lenders that borrowers may refuse additional paid services

In their joint information letter to banks, microfinance organisations, consumer credit cooperatives, and agricultural consumer credit cooperatives, the Bank of Russia and Rospodtrebnadzor point out that hard selling of additional paid, including legal and consulting, services is unacceptable and that consumers are entitled by law to refuse already purchased services.

Both supervisory authorities have been receiving complaints from individuals that lenders do not let them refuse additional paid services thereby ignoring their lawful consumer rights. At the same time, such services are often paid from borrowed funds, and their terms are determined unilaterally by the service provider in standard forms.

Russian laws prohibit making a purchase of certain goods, works or services a pre-condition for purchasing others and allow borrowers to refuse additional paid services without losing an opportunity to receive a loan. Consumers may also refuse an already bought additional service at any time subject to compensating its provider for actual costs. According to the Bank of Russia and Rospotrebnadzor, any contract provisions violating lawful rights of consumers are void.