The Government is creating the Financial Services Complaints Service as an independent institution, deciding on this after having examined the issue at the prompting of Prime Minister Viktor Orbán.

The role of the Financial Services Complaints Commissioner will be to protect rights, to conduct investigations, to formulate proposals and to advise; in this way the commissioner will contribute to the financial protection of consumers and the supervision of financial service providers (banks and credit institutions). In addition, the Government sees the Financial Services Complaints Commissioner as having an important role in the development of financial culture generally.

On 10 September, in his preliminary address at the first autumn sitting of Parliament, the Prime Minister said that although the Government has enacted several measures in the area of financial consumer protection, there are unfortunately still abuses, and consumer complaints to financial service providers are frequent. For this reason, stricter supervision of financial service providers is necessary. As has been previously reported, the dramatic rise in household debt – and within that the amassing of high-risk foreign currency debt – is in large part due to imprudent lending and borrowing practices; many who have found themselves trapped in debt feel that the present system of consumer protection institutions is inadequate for the protection of their interests and the supervision of credit institutions’ activities. The Hungarian Financial Supervisory Authority receives 200,000 to 300, 000 complaints every year related to financial institutions. The vast majority of complaints relate to credit institutions, followed by insurers and in third place financial companies.

After having reviewed several international examples, the Government has decided to create the The role of the Financial Services Complaints Commissioner will be to protect rights, to conduct investigations, to formulate proposals and to advise; in this way the commissioner will contribute to the financial protection of consumers and the supervision of financial service providers (banks and credit institutions). In addition, the Government sees the Financial Services Complaints Commissioner as having an important role in the development of financial culture generally. as an independent institution along the lines of the educational commissioner’s office. Thus there are now three bodies which ensure stronger and comprehensive financial consumer protection: the Hungarian Financial Supervisory Authority and the Financial Arbitration Board are the other two. The Government expects that strengthening the institutional system will improve protection of the interests of those using financial services, enhance knowledge of financial and consumer rights, and through this contribute to increased stability in the financial system.

The commissioner’s office will operate as an institution protecting rights, carrying out investigations, making proposals and giving advice. The office can initiate proceedings at the Financial Consumer Protection Authority, can recommend the drafting of legislation, and can pass opinion on draft legislation. It can also play a role in informing consumers and in communication, in order to improve the financial culture generally.

The legislative instruments on the exact tasks and operating system of the office are being developed by the Ministry for National Economy and the Ministry of Public Administration and Justice, and the result of their deliberations will be put to the Government within a few weeks. The Financial Services Complaints Commissioner will be appointed by the Minister for National Economy, but nobody – including the minister – will be able to instruct the commissioner in the course of his or her duties, and the office will operate with complete independence and impartiality.

(Ministry of Public Administration and Justice)