PARLIAMENT yesterday unanimously approved the creation of a Financial Ombudsman, offering a cheaper and more simplified option of dealing with economic disputes.
According to the law, which was submitted to the House Legal Affairs Committee in 2007 and only reached the Plenum yesterday, consumers can apply to the Ombudsman to seek out-of-court settlements on disputes with financial institutions (FI).
Consumers will be able to submit complaints of a financial nature and the Ombudsman can mediate and arrange a friendly out-of-court settlement.
The measure doesn’t include co-op banks and the Ombudsman’s decisions won’t be legally binding. The Body will also be able to examine and resolve cross-border financial disputes.
Basically, consumers will be able to seek compensation without having to go through exhausting court procedures. However, if consumers wish, they can turn to court.
The Ombudsman is a legal person of public justice, for whom a board of directors will be appointed – comprising of spokesmen for local authorities, FI spokesmen and a representative for consumers – as well as a Financial Commissioner, a deputy Financial Commissioner and staff employed by the Ombudsman.
The Body will be funded by personal contributions from each FI that has a complaint filed against it, a standard annual contribution from each FI, depending on its activities, and by the consumer who will pay a small fund for his complaint.
The House Plenum’s decision was unanimous with all MPs agreeing it was a positive measure that would be in the consumers’ best interests.
The Legal Affairs Committee chairman, DISY’s Ionas Nicolaou, said if there were any problems in its implementation, amendments would be made.
MANY people have been duped into buying property in Cyprus that has been built on mortgaged land – and face the very real threat of losing their homes if the developer fails.
Banks in Cyprus are often complicit in this ‘scam’ as they fail to disclose information about existing mortgages to buyers seeking a mortgage to buy property.
It has taken three years for parliament to reach its decision on the appointment of a Financial Ombudsman. Let us hope he has a sufficient number of staff to deal with the deluge of complaints flooding into his office.