ANNUAL REPORT 2017 Table of Contents
2 Board Chairman’s Address
3 Financial System Mediator’s Address
4 The Office of Financial System Mediator
8 2017 Major Events
18 Programs Implemented in 2017
24 Activities Planned for 2018
26 How Do Our Customers Evaluate Us?
32 Statistics of Claims
52 Financial Statement and Audit Opinion
60 Precedents/Exemplary Cases
84 Acknowledgements
88 List of Organizations Which did not Sign the Covenant Board Chairman’s the Office, as well as the invitations the Office re- Address ceives year by year to participate in important con- ferences and symposiums organized by international Dear reader, institutions.
As we make another round-up of the results of year All the above-mentioned achievements have become 2017, we can proudly state that notwithstanding a reality thanks to the dedication and diligence of the the difficulties, we have been able to implement entire staff of the Office. I would like to sum up my many important projects and call to life many ideas. address by saying thank you for your special dedication We remained committed to our strategic goal – and excellent teamwork. I wish everybody the energy to increase and enhance the confidence in the and decidedness on the way to new achievements. Financial Mediator and the financial system on the whole and to protect consumers’ rights and in- terests. The outcomes of our activities are visi- ble every day. This is expressed, first of all, by the increased number of clients applying to us and the ever-growing cooperation with financial institutions.
On January 16, 2017, the Board of Trustees of the Financial System Mediator’s Office decided to reap- point Piruz Sargsyan as Financial System Mediator. Throughout her tenure, the Office of Financial System Mediator has recorded plenty of achieve- ments, implemented a number of programs, while Arkadi Khachatryan earning a high level of awareness in Armenia and on the international arena. This can be supported Chairman of the Board by the growing number of complaints submitted to of Trustees
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Board Chairman’s Address Financial System er Financial Education and Awareness” program. In Mediator’s Address 2017, as part of the program, the Office not only paid visits to high schools and universities in all regions Dear reader, of the Republic of Armenia and Artsakh, but also organized informal educational events, which were I am happy to say that year 2017 was outstanding by highly appreciated by the public. the number of citizens who applied to the Office, the growing number of cases investigated and disputes re- We are also proud to note that international or- solved in favor of the customers. The reporting year ganizations view the Mediator’s Office as the best was also full of events, programs and sustainable successful experience among post-soviet countries, cooperation with domestic and foreign partners. and this is why the Office receives various invita- tions to share our experience with other countries In 2017, the Office received a total of 5,020 complaints, and schemes. of which 4,368 relating to the financial services. Com- pared with the previous year, complaints have in- In conclusion, I would like to thank our team, since creased by 6%. The overwhelming majority of the cas- it is by joint efforts that we successfully overcome all es examined during the year (1,455 out of 1,672) ended difficulties and move forward. I am confident that we up with financial organizations having paid compen- are on the right path to achieving our goals and will sation to the customers, a total of AMD 181,300,801 continue working with the same vigor and dedication. through facilitation of the Mediator. It is noteworthy that 50% of the cases with positive outcome has been resolved through mediation.
I would like to emphasize that the increase in the Piruz Sargsyan number of claims submitted to the Office is largely attributable to a key area of activity of the Office of Financial System Mediator, i.e. the implementation of the “Consum- Mediator
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Financial System Mediator’s Address THE OFFICE OF FINANCIAL SYSTEM MEDIATOR The Office of Financial System Mediator (FSM) is an Governance of the Office of FSM establishment with independent management sys- tem. Its founder is the Central Bank of the Republic According to the Republic of Armenia Law on Finan- of Armenia. The Office of FSM is called to settle out cial System Mediator, bodies of management of the any property disputes that arise between consumers Office of FSM are: as natural persons and financial organizations. The services of FSM are free of charge; the process of • Board of Trustees, and review of complaint is explicit, fast and transparent. • Manager of the Office, i.e. the Mediator. The Office of FSM was established pursuant to the Republic of Armenia Law on Financial System According to the Republic of Armenia Law on Finan- Mediator, passed on June 17, 2008. The Office of FSM cial System Mediator, the Board of Trustees of the started professional activity from January 24, 2009. Office of FSM consists of 7 members, and they are appointed as follows:
Objectives of the Office of FSM • one member by the Government of the Republic of Armenia, The objectives of the Mediator’s Office include: • one member by the Board of the Central Bank of the Republic of Armenia, • Protection of consumer rights and interests in • one member by organizations that advocate the financial market; protection of consumer rights, and • Fast, effective and free of charge review and • four members by unions of organizations. handling of claims of clients; • Enhancement of the public confidence in the The Board of Trustees of the Office of FSM is called financial sector. to approve internal policies and procedures of the Office, hear the Financial System Mediator reports, check the status of implementation of the decisions Core values of the Office of FSM it has made, oversee day-to-day activities of the Office and its financial and economic performance, The Office has pledged to working effectively and approve the budget of the Office, any changes earning more public trust – these are core principles, made thereto; oversee the performance against the which underlie the activity of the Office of FSM. The budget, approve annual financial accounts and take following are core values, which are also embedded on other functions as required by the law. According in the strategy of the Office of FSM: to the law, the Board of Trustees shall not interfere with the professional activities of the FSM. • Impartiality in case review; • Equality or equal rights for the parties; According to the Republic of Armenia Law on Finan- • Caring attitude towards the customers; cial System Mediator, the Mediator shall be required • Priority to achieving reconciliation of the parties; to have higher education, firm authority and at least • Operational effectiveness; five years of work experience. The Mediator shall • Transparency and openness; not be a person who has worked in any financial or- • Partnership and confidentiality; ganization in the last three years. The Mediator shall • Professionalism and teamwork; not: i) be engaged in entrepreneurial activity, ii) be • International cooperation and innovative solu- a member of management at the party, iii) hold a po- tions. sition in central or local governments, commercial
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The Office of Financial System Mediator undertakings, iv) perform other paid work except for scientific, pedagogical and creative activities; the Mediator must refrain from any actions that cast doubts over their independence and impartiality.
The Office of FSM has an auditor. The auditor is ap- pointed by the Board and reports to the Board direct- ly. The auditor carries out independent and impartial investigation and evaluation of the operations of the Office of FSM through checkups/examinations.
The Office of FSM has two pillars, which make sure the Office operates fluently. These are:
• Support Group, which is responsible for adminis- trative tasks to make sure day-to-day activities of the Office are uninterrupted; and
• Claim Acceptance and Investigation Group, which makes sure the Office performs its professional duties as prescribed by the law. This group, in turn, consists of:
◉ specialists who accept claims, receive the visits of clients and provide them with an upfront con- sulting,
◉ specialists who investigate claims and whose main function is claim investigation, explanation/ clarification, legal attendance of the Office, inter- national cooperation, and
◉ support group for the specialists who investi- gate claims; the group is primarily responsible for helping with claim investigation, making visits to schools and getting involved in activities related to the “Increasing Consumer Financial Education and Awareness” program.
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The Office of Financial System Mediator STRUCTURE
The Board of Auditor trustees
Support The Mediator Assistant to Group Mediator
Head of the case Handling and investigating group
Complaints Case Specialists Handlings Investigators Supporting Case Specialists Investigators
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The Office of Financial System Mediator 2017 Major Events January
16 Piruz Sargsyan was re-appointed as Financial System Mediator.
18 A quiz was announced in connection with the 8th anniversary of the establishment of the Office of Financial System Mediator.
24 An annual event in celebration of the 8th anniversary of operations of the Office of Financial System Mediator. The winners of the quiz were announced.
25 A meeting with the representatives of the Parliament of Kyrgyz Republic took place. A seminar was held at high school No. 139 in Yerevan.
26 A seminar was held at high school of the Institute of Forensic Expertise and Psychology “Azpat-Veteran” in Yerevan.
31 A seminar was held at high school No. 142 in Yerevan.
February
01 A seminar was held at basic high school of Yerevan Kh. Abovyan Pedagogical University.
03 A seminar was held at Yerevan high school of “M. Sebastatsi” educational complex.
06 A seminar was held at high school No. 170 in Yerevan.
08 A seminar was held at high school of “North” University in Yerevan.
10 A seminar was held at high school No. 144 in Yerevan.
13 A seminar was held at high school No. 148 in Yerevan.
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2017 Major Events 15 A seminar-meeting was organized for the students of the Faculty of Economics and Management of Yerevan State University. A seminar was held at high school of “Haybusak” University in Yerevan.
17 A seminar was held at basic high school of State Engineering University of Armenia.
22 A seminar was held at basic high school of Armenian State Agrarian University.
24 A seminar was held at Ijevan high school No. 2.
March
27 A seminar-meeting was organized for the students of French University.
29 A seminar-meeting was organized for the schoolchildren of secondary schools in communities Anipemza and Bagravan.
30 A seminar-meeting was organized for the schoolchildren of secondary schools in communities Yervandashat and Bagaran.
31 A seminar-meeting was organized for the schoolchildren of Sarukhan secondary school No. 1.
April
20 A quiz was announced for participation in the annual international conference organized by the Office of Financial System Mediator.
21 As part of “A Month of My Finances” program, the participants were offered a visit to the Office of Financial System Mediator.
22 A seminar-meeting was organized for the schoolchildren of Gusanagyugh secondary school.
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2017 Major Events 25 As part of “A Month of My Finances” program, a workshop was held entitled “Have a Ques- tion or a Problem in the Financial Sphere: how and whom to apply?” A seminar-meeting was arranged for the schoolchildren of Hovq secondary school.
26 A seminar-meeting was organized for the schoolchildren of Nor Geghi secondary school No. 1.
27 A seminar-meeting was organized for the schoolchildren of Kaqavadzor secondary school.
28 A seminar-meeting was organized for the schoolchildren of Katnajur secondary school.
May
02 As part of “A Month of My Finances” program, a workshop was held entitled “How to Use Payment Cards in a Smarter Way?” A seminar-meeting was arranged for the schoolchildren of Hartagyugh secondary school.
03 As part of “A Month of My Finances” program, the participants were offered a visit to the Office of Financial System Mediator. A seminar-meeting was organized for the schoolchildren of Oshakan secondary school.
12 A seminar was held at Gavar State University.
15 As part of “A Month of My Finances” program, the participants were offered a visit to the Office of Financial System Mediator.
20 As part of “A Month of My Finances” program, participation in the “Brain-Ring” contest organ- ized by the Central Bank of Armenia and Junior Achievement of Armenia.
21 As part of “A Month of My Finances” program, participation in an intellectual intercollegiate championship organized by the Central Bank of Armenia.
25 The start of the 7th annual conference entitled “The Financial Ombudsman System Steered to Enhancing Public Confidence and Increasing Financial Intermediation” hosted by the Office of Financial System Mediator.
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2017 Major Events June
16 As part of “A Month of My Finances” program, participation in the painting contest organized by the Central Bank of Armenia.
July
04 As part of “Mediator’s Camp” program, a seminar was held in “SOS” Children’s Village.
07 As part of “Mediator’s Camp” program, a seminar was held in Byurakan, at the Armenian National Scouts Movement Camp. The report of the Office of Financial System Mediator for 2016 was published.
14 As part of “Mediator’s Camp” program, a seminar was held in Aghveran, at “Arshalouys” camp.
31 As part of “Mediator’s Camp” program, a seminar was held at the summer camp of “Hanqavan Khotor Jur Resort” LLC.
August
02 As part of “Mediator’s Camp” program, a seminar was held at “Lusabats” camp in Pyunik village.
04 As part of “Mediator’s Camp” program, a seminar was held at “Heqiatayin Kirch” camp in Hanqavan.
07 As part of “Mediator’s Camp” program, a seminar was held at “Aragats” camp in Hanqavan.
09 As part of “Mediator’s Camp” program, a seminar was held at “Hasmik” camp in Hanqavan.
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2017 Major Events 11 As part of “Mediator’s Camp” program, a seminar was held at “Aghbyur” camp in Tsaghkadzor.
18 As part of “Mediator’s Camp” program, a seminar was held in eco club of “Azhdahak” Environmental Center.
September
13 A seminar was held at the basic college of Armenian State University of Economics (Gyumri). A seminar was held at Gyumri high school No. 42.
15 A seminar was held at high school No. 3 in Artik.
19 A seminar was held at the basic college of Armenian State University of Economics (Gyumri). A seminar was held at high school of Shirak State University.
20 A seminar was held at Vanadzor high school No. 10. A seminar was held at Vanadzor high school No. 11.
22 A seminar was held at Vanadzor high school No. 17. A seminar was held at H. Shiraz high school in Gugarq.
25 A seminar was held at H. Tumanyan high school in Stepanavan. A seminar was held at high school in Tashir.
26 A seminar was held at the Specialized School for Physics and Mathematics (Stepanakert) named after A. Shahinyan. A seminar was held at Artsakh National Agrarian University. A seminar-meeting was organized with the representatives of financial organizations in Artsakh.
27 The Financial System Mediator Piruz Sargsyan was invited to attend the conference “Interna- tional Network of Financial Ombudsmen” INFO2017 as speaker. A seminar was held at M. Mashtots University in Artsakh. A seminar was held at high school No. 8 in Stepanakert. A seminar was held at high school No. 5 in Alaverdi. A seminar was held at high school No. 8 in Alaverdi.
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2017 Major Events 28 A seminar was held at Artsakh State University. A seminar was held at high school No. 11 in Stepanakert.
29 A seminar was held at high school in Yeghegnadzor. A seminar was held at high school in Vayq.
30 A seminar-meeting was organized with the schoolchildren of secondary schools in Azatek and Arin communities.
October
02 A seminar was held at high school in Jermuk.
03 A seminar-meeting was organized with the schoolchildren of the secondary school in Azatan community.
04 A seminar-meeting was organized with the schoolchildren of the secondary school in Darpas community. A seminar was held at high school in Vardenis.
05 A seminar was held at the educational complex in Vardenik community.
06 A seminar-meeting was organized with the schoolchildren of secondary school No. 3 in Sarukhan community.
09 A seminar was held at high school in Dilijan.
10 A seminar-meeting was organized with the schoolchildren of basic school No. 11 in Hrazdan.
11 The Financial System Mediator Piruz Sargsyan was invited to attend the 2nd international conference “Protection of Rights of Consumers of Financial Services” as speaker. A seminar-meeting was organized with the schoolchildren of the secondary school in Gandzaqar community. A seminar was held at high school in Aparan.
12 A seminar-meeting was organized with the schoolchildren of the secondary school in Gndevaz community.
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2017 Major Events 13 A seminar-meeting was organized with the schoolchildren of the secondary school named after P. Ghevondyan in Proshyan community. A seminar was held at high school in Talin.
14 The 5th meeting between the Office of Financial System Mediator and representatives of the domestic banking community took place.
17 The Office of Financial System Mediator took part in Job Fair organized by the French University in Armenia. A seminar was held at high school in Noyemberyan. A seminar-meeting was organized with the schoolchildren of the secondary school in Alapars community.
18 A seminar-meeting was organized with the schoolchildren of the secondary school in Geghar- qunik community.
19 The Financial System Mediator Piruz Sargsyan was invited to attend the international conference “Protection of Consumer Rights in the Financial Sector: Challenges and Prospects” as speaker. A seminar was held at high school No. 10 in Hrazdan.
20 A seminar was held at high school in Nor Hachin.
23 A seminar was held at high school in Dzoragyugh.
25 A seminar was held at high school in Vedi.
27 A seminar was held at high school No. 5 in Masis.
November
08 A seminar was held at the high school named after S. Vardanyan in Byureghavan. A seminar was held at Armenian National Agrarian University.
09 A seminar was held at high school in Charentsavan.
10 A seminar was held at high school No. 5 in Vagharshapat.
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2017 Major Events 13 A seminar was held at high school in Chambarak.
15 A seminar was held at high school in Vosketap.
17 A seminar was held at high school No. 5 in Ashtarak.
20 A seminar was held at high school No. 1 in Armavir.
22 A seminar was held at high school No. 29 in Yerevan.
23 A seminar was held at high school No. 83 in Yerevan.
25 A get-together was arranged for discussions between the Office of Financial System Mediator and representatives of the domestic insurance sector.
28 A seminar was held at high school No. 4 in Armavir.
29 A seminar was held at high school No. 127 in Yerevan.
December
01 A seminar was held at high school No. 105 in Yerevan.
04 A seminar was held at the general education school named after Eornekian in Vagharshapat.
06 A seminar was held at high school No. 94 in Yerevan.
08 A seminar was held at high school No. 103 in Yerevan.
09 A tournament “An Encounter with Banking Laws” was organized by the Office of Financial Sys- tem Mediator with the participation of students from Armenian universities.
11 A seminar was held at high school No. 65 in Yerevan.
12 An international forum/discussion “Control over Providing Lending to Individuals and Preventing Overburdened Debt” was hosted by the Mediator’s Office.
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2017 Major Events 13 A seminar was held at high school No. 119 in Yerevan. A new procedure “Acceptance and Investigation of Claims’ was adopted by the Board of Trustees of the Financial System Mediator’s Office.
15 A meeting with representatives of the Central Bank of Mozambique took place. A seminar was held at high school No. 195 in Yerevan.
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2017 Major Events Programs implemented in 2017 The “Consumer Financial Economics and Management of Yerevan State Uni- Education and Awareness” versity, French University, YSU Ijevan Branch, Gavar program State University, Yerevan State Linguistic and Social Science University after V. Bryusov and Armenian National Agrarian University).
Seminars at schools Hosting schoolchildren In the period under review, the Office of FSM or- at the Office of FSM under ganized seminars for 11th and 12th graders (a to- the “20 Days for 20 Schools” tal of 4169 schoolchildren from 57 high schools program in the regions of the Republic of Armenia and capital Yerevan), pursuant to a preset timeta- In the period under review, the program select- ble. Specifically, seminars were held at Yerevan ed 23 schools from regions of Armenia in order to high schools No. 139, 142, 114, 170, 148, 29, 83, 127, organize seminars and meetings at the Office of 105, 94, 103, 65, 119, 195; high school of the Insti- Financial System Mediator. A total of 88 school- tute of Forensic Expertise and Psychology “Azpat- children from secondary schools in rural commu- Veteran”; Kh. Abovyan basic high school, high school nities such as Anipemza, Bagravan, Yervandashat, of “M. Sebastatsi” educational complex”, high schools Bagaran, Sarukhan (schools No. 1 and 3), Gusana- of “North” and “Haybusak” Universities, basic high gyugh, Hovk, nor Geghi, Kaqavadzor, Katnajur, school of State Engineering University of Armenia Hartagyugh, Oshakan, Azatek, Arin, Azatan, Dar- and Armenian State Agrarian University, Ijevan high pas, Gandzaqar, Gndevaz, Proshyan (P. Ghevon- school No. 2, Gyumri high school No. 42, Artik high dyan School), Alapars and Gegharqunik, as well as school No. 3, two high schools of Basic College of Hrazdan School No. 11 after Saroyan have attended Armenian State university of Economics (Gyum- the seminars. ri), high school of Shirak State University, Vanadzor high schools No. 11 and 17, Gugark high school, Tashir A trip to the Central Bank’s Visitor Center, a seminar high school, Alaverdi high schools No. 5 and 8, high for schoolchildren, along with refreshments and vi- schools in Yeghegnadzor, Vayk, Jermuk, Vardenis, sits to the History Museum of Armenia, were in this Vardenik Educational Complex, high schools in Dili- year’s entertainment package. jan, Tumanyan, Noyemberyan, Hrazdan, Nor Hachin, Dzoragyugh, Vedi, high school No. 5 in Masis, high schools in Byureghavan and Charentsavan, high “The Mediator’s Camp” school No. 85 in Vagharshapat, high school named after Eurnekian, high schools in Chambarak and In summer of this year, the staff of the Office or- Vosketap, high school No. 5 in Ashtarak and high ganized seminars also in summer camps, particu- schools No. 1 and 4 in Armavir. larly in “SOS” Children’s Village, the Armenian Na- tional Scouts Movement Camp, “Arshalouys” Camp, the camps “Khotor Jur” “Lusabats”, “Heqiatayin Kirch”, Seminars at universities “Aragats”, “Hasmik” in Hanqavan and the camp “LAVA Aghbyur” in Tsaghkadzor and “Eco” camps in In the period under review, the Office of FSM or- Gegharqunik village. ganized seminars for a total of 250 students from a variety of universities in Armenia (Faculty of
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Programs implemented in 2017 Visit to the Republic of Artsakh Media coverage
In the framework of the program “Consumer Finan- In the period under review, we signed contracts with cial Education and Awareness” the Office of FSM a number of TV companies to air infomercials about organized a series of seminars in the Republic of the Office of FSM on television. Artsakh with involvement of different target groups. In particular, seminars were held in high schools No. 8 and 11 and Specialized School for Physics and Dissemination of information Mathematics (Stepanakert) in capital Stepanakert, via internet and social media involving a total of 346 schoolchildren. The website of the Office of FSM as well as on- Seminars were organized for 273 students of Artsakh line social media and social networking services, State University, National Agrarian University and such as Facebook and Twitter, remain ideal places M. Mashtots University. for the Office to post its regular news updates and other relevant information about various events, The other target group included employees of finan- day-to-day activities, including reports, statements, cial organizations and the Government of the Re- claim typologies and customary business practices, public of Artsakh. At the seminars, the specialists of and so on. the Office shared their knowledge, talking about the activities of the Office of Financial System Mediator and the cases and precedents, which were under Internship examination by the Office. In 2017, as part of awareness raising campaign for young people and student involvement in the “Moot court in banking law” Office activities, we arranged practical training/ internship for 22 students from various education- To stir up students’ interest in the banking law and al establishments in Armenia. The interns had an let them consider an in-depth study of the financial opportunity to obtain theoretical and practical system, the Office of Mediator organized moot court knowledge of what the Office of FSM does in par- in banking law. A total of eight teams representing ticular and the financial sector of Armenia on the law faculties of Yerevan State University, French Uni- whole. versity in Armenia, Armenian-Russian (Slavonic) Uni- versity, Armenian Academy of Public Administration, and Lomonosov Moscow State University (Yerevan) Participation in participated in the contest. the “A Month of My Finances” project One of the teams representing Yerevan State Uni- versity won the contest. The winner of the nomina- The project initiated by the Central Bank of Ar- tion “best negotiator” has been chosen out of that menia offered an entire month of organized fi- team, too. Awards were granted to the team of Ar- nancial tours for the citizens starting from April. menian-Russian (Slavonic) University that won the Participants had the opportunity to visit diffe- nomination “best claim-application” and the team of rent financial institutions, including the Office of French University in Armenia that won the nomina- FSM, among many other measures. Those who tion “best response”. visited the Office of FSM learned more about the
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Programs implemented in 2017 activities of the Office, its structure and what it 27 participants representing 15 banks attended this has done and will do next. Within the framework regular event. The 2016-2017 precedents, problems of the project, 166 participants were hosted by the identified at the examination of client complaints, Office of FSM, 70 of who benefited from seminars as well as the draft procedure of acceptance and at the Office. The staff of the Office also partici- investigation of claims by the Mediator were the pated in the Financial & Economics tournament, in top issues of the meeting, followed by team exer- “What? Where? When?” intellectual challenge and cises and discussions. a drawing contest, all organized within the scope of the project, and awards were handed out to the participants. A roundtable event with insurance companies
In the period under review, the Office of FSM ini- tiated a roundtable meeting, another annual event, Cooperation with with the domestic insurance market participants in financial institutions Dilijan, Armenia. The meeting hosted the executive director of the Armenian Bureau of Motor Insurers and executive directors of insurance companies and representatives from insurance brokerage firms, Following best international practices and striv- who are responsible for relations with the Office of ing to be an impartial and trustworthy scheme, FSM. At the meeting, participants talked, inter alia, we are putting all possible efforts to raise public of the 2016-2017 precedents, problems identified at confidence in financial institutions in the Republic the examination of client complaints, identified cus- of Armenia. In view of the objectives set before tomary business practices, the draft procedure of ac- the Office, we do our best to maintain partner- ceptance and investigation of claims by the Media- ship relations with financial institutions, trying to tor, and the next year’s events. have them settle the dispute through conciliation, so that a faster outcome is reached, a mutually acceptable solution to the parties is found and Best cooperating a business relationship between the entity and its partners customer is sustained. Traditions flourish when they are maintained: at the event to celebrate seven years into the activities A meeting with of the Office of FSM, the Mediator had the pleas- representatives of ure to announce the winners in the nomination of the banking system “Best Cooperating Company” and “Best Cooperating Officer”. As always, best cooperating partners were Strengthening cooperation with banking institu- chosen taking into account such criteria as the ex- tions is important; in the period under review the tent to which the organization has been involved in Office of FSM organized the 5th meeting-seminar the case review, the share of cases ended with re- in a row to bring together the Office specialists conciliation of the parties in total, and so on. Based and the domestic banking community to share ex- on the 2017 results, the best cooperating bank was periences and propose steps to find solution to ex- UniBank CJSC and best cooperating insurance com- isting problems in the banking industry. A total of pany, Nairi Insurance LLIC.
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Programs implemented in 2017 The willingness of employees of financial organiza- touched upon at the conference. Guest speakers of tions to support the Office of FSM in the process of the conference included the Financial Ombudsmen claim investigation is applauded, and the Mediator of Great Britain and Ireland, experts in the field of always takes the time to thank them. This year’s cer- mediation and arbitration from Great Britain and tificate “Best Cooperating Officer” was awarded to Cyprus, as well as financial experts from Armenia Ms. Anna Baghdasaryan, a chief specialist of General and Russia. Legal Services of VTB-Armenia Bank CJSC (banking), and to Mr. Hovik Ohanjanyan, a lawyer at SIL Insu- rance LLIC (insurance). Organizing a conference
The Office of FSM organized a conference titled “Consumer Credit Regulation and Prevention of Over-indebtedness”, which was held in Yerevan International cooperation (Armenia Marriott Hotel Yerevan) on December 12, 2017. Participants of the conference discussed im- portant topics, such as recent developments in the consumer credit market in Armenia, preventing The year under review was remarkable for the Of- over-indebtedness; they also referred to a compar- fice of FSM by achievements it had in the interna- ative analysis of consumer lending regulations and tional arena. In 2017, the Office of FSM organized talked about how bankruptcy regulation and prac- international conferences, arranged meetings with tice work in Armenia and elsewhere in the world. international organizations to exchange expe- Conference speakers included leading experts from rience, hosted specialists from different countries Armenia, Australia, South Africa, Belgium, Bulgaria, to share its know-how with them. The Mediator and Russia. has received invitations to participate as guest speaker in a number of international conferences, which proved a good platform to talk about the Meeting with representatives activities of the Office, challenges and the ways of the Parliament and of how to tackle difficulties. the National Bank of the Kyrgyz Republic
International conference In the period under review, the Financial System Mediator’s staff met with representatives of the The Office of FSM organized the 7th annual con- Parliament and the National Bank of the Kyrgyz Re- ference entitled “The Financial Ombudsman Sys- public at the Office of FSM. The aim of the meeting tem - Enhancing Public Confidence and Increasing was to study the experience of the Financial Sys- Financial Inclusion”. It was held in Yerevan (Armenia tem Mediator since at present the Kyrgyz Republic Marriott Hotel Yerevan) on May 25-26, 2017. The con- is discussing the concept of introducing a financial ference has addressed issues such as the applicabili- ombudsman’s services to their market. During the ty of alternative dispute resolution schemes, conflict meeting, the Office specialists talked about the psychology, mediation, international arbitration, and basic principles of the Mediator’s Office, the proce- labor dispute resolution. Fraudulent transactions in dures for receiving and examining cases and some money transfers as well as compulsory third par- important aspects of the Republic of Armenia Law ty liability insurance were other important topics on Financial System Mediator.
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Programs implemented in 2017 Participation in Meeting with international conference, representatives of INFO2017 the Central Bank of Mozambique
On September 24-27, 2017, the International Net- On December 15, 2017, a meeting was held with work of Financial Ombudsmen, INFO2017, had their representatives of the Central Bank of Mozambique seventh get-together in a row. This time, it was held at the Financial System Mediator’s Office. During in Melbourne, Australia. The Financial System Medi- the meeting, the Office specialists explained to the ator Piruz Sargsyan was invited to attend the confe- guests the basic principles of the Mediator’s Office, rence as speaker, where she delivered a speech titled the procedures for receiving and examining cases, “How to Achieve High Quality and Effectiveness of and the guests learned about some important as- Dispute Resolution Simultaneously?”. pects of the Republic of Armenia Law on Financial System Mediator.
Participation in the 2nd international conference “Protection of Rights of Consumers of Financial Services”
On October 11, 2017, the second international confe- rence “Protection of Rights of Consumers of Finan- cial Services” was held in Moscow, Russia. Mrs. Piruz Sargsyan, the Financial System Mediator, who was invited as speaker, appeared with a speech about the principles and effectiveness of activities of the Office of FSM.
Participation in conference “CONSUMER RIGHTS PROTECTION IN FINANCIAL SECTOR: CHALLENGES AND PROSPECTS”
On October 19-20, 2017, an international conference entitled “Protection of Consumer Rights in the Fi- nancial Sector: Challenges and Prospects” was held in Moscow, Russia. The Financial System Mediator Piruz Sargsyan attended the event as speaker and delivered a speech presenting the experience, diffi- culties and achievements of the Mediator’s Office in Armenia.
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Programs implemented in 2017 Activities planned for 2018 Consumer financial Media coverage education programs As part of plans for media coverage in the upcoming The Office of FSM aims to push forward the imple- year, we will continue our efforts to get infomercials mentation of the “Consumer Financial Education designed and prepared, aired on leading Armenian and Awareness” program over 2018. We intend to TV channels. The development of new video clips is welcome in Yerevan senior schoolchildren of high also planned. In addition, media coverage will not schools from different regions of Armenia; in the only be provided via TV channels but also through meantime, we will continue seminars both for se- social media account. nior schoolchildren and students.
Discussions/seminars Inclusion in the National Strategy Further roundtable events will be organized at which for Financial Education domestic financial industry representatives will be expected to address issues relating to the review Our Office of FSM will continue sustainable coope- of typical examples of client claims, controversies ration with the Central Bank of Armenia as part of emerging as a result of examination and other implementation of the program on national curricu- matters of relevance. lum for financial education, including the implemen- tation of the “A Month of My Finances” program. Preparing for the 8th international “Mediator’s Camp” conference
In 2018, the Mediator’s Office will continue the In 2018, we are planning to host our annual inter- “Mediator’s Camp” program in order to transfer national conference entitled “Digital transformation knowledge to children about financial services and the future of financial industry”. and stir up their interest in the financial system in an “out-of-classroom” mode, through the use of games, contests and interactive workshops during Rethinking the procedures the summer camps. and transition to electronic communication
“Moot court Starting from 2018, the Office of FSM will make in financial law” transition to electronic document circulation and electronic administration of claim handling to in- In 2018, the Office of FSM will arrange a specific crease the quality and speed of customer service. playground to offer students a staged encounter The procedure of and reviewing customer com- with the financial law. This will be aimed at enhan- plains/claims needs to be simpler and quicker, cing the students’ interests in financial law and letting without the client having to necessarily visit the them consider an in-depth study of the field. Mediator’s Office.
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Activities Planned for 2018 How Do Our Customers Evaluate Us? Measuring Mediator’s Quality of Work The results of the survey suggest that most frequent features, which the respondents attributed to the In the year under review, the Office of Financial Sys- Office are: tem Mediator carried out a survey with the aim to measure customer satisfaction, assess the effective- • Professionalism ness of activity, figure out the accessibility to the Of- • Caring fice, and study other aspects of relevance. The target • An organization with a positive image group for the survey included the customers who • Mission to help have applied to the Office of Financial System Me- • An impartial approach diator in the period 2016-2017 and who have taken direct part in full investigation of the claim. A total of 811 customers from Yerevan and the regions (inclu- ding Artsakh) participated in the survey.
Features typical to the Office of Financial System Mediator, by respondent
All Complaint accepted Complaint not accepted respondents (%) for investigation (%) for investigation (%)
Professionalism 17 13 16
Caring 14 12 9
An organization with a positive image 14 11 13
Mission to help 13 9 18
An impartial approach 13 11 8
Fairness 10 9 3
Promptness 7 6 4
Trust 7 5 7
Problem resolution 5 5 2
Customer satisfaction 5 4 2
An effective organization 2 2 2
Services free of charge 2 1 2
Other response 9 7 8
It was difficult to answer 11 7 17
A non-effective organization 3 1 7
Negative customer attitude 2 1 3
N= 811 624 187
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How Do Our Customers Evaluate Us? Features typical to the Office of Financial System Mediator, by complaint outcome
Complaint Complaint Complaint Parties satisfied satisfied turned down (%) have come in full (%) in part (%) to conciliation (%)
Caring 17 17 10 15
An organization 13 16 10 14 with a positive image
Professionalism 17 16 17 20
An impartial 15 15 4 25 approach
Mission to help 13 14 6 8
Fairness 16 13 3 18
Promptness 9 7 4 11
Problem resolution 9 5 3 8
Trust 9 4 2 8
Customer 10 4 1 5 satisfaction
Negative 0 1 5 0 customer attitude
A non-effective 0 1 4 0 organization
Bias 0 0 8 1
Other response 7 13 12 15
It was difficult 2 9 18 5 to answer
N= 172 220 85 79
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How Do Our Customers Evaluate Us? As a result of survey, the compliance of image- respondents have rated accessibility feature as the based features with the Office of Financial System highest score, 4.9. Mediator has been estimated to 4.5 and higher. All
The extent to which features comply with the Office of Mediator (score 1-5)
ot accepted ot accepted N Terminated Insurance Banking insurance Health Deposit Loan insurance Property and settlements Payments Other banking Other All respondents Yerevan Regions Women Men investigation for Accepted investigation for party l Third Feature iability insurance
Accessible to all 4.9 4.9 4.8 4.8 4.9 4.9 4.8 4.8 4.9 4.8 4.9 5 4.9 4.9 5 5 4.5 4.8
Follows 4.8 4.8 4.8 4.7 4.8 4.8 4.6 4.8 4.8 4.7 4.8 5 4.8 4.7 4.8 4.5 4.3 4.6 rules of confidentiality
Willing 4.7 4.7 4.6 4.6 4.7 4.8 4.4 4.6 4.7 4.5 4.7 4.8 4.7 4.7 4.8 4.4 3.7 4.5 to help
Professionally 4.7 4.7 4.7 4.6 4.7 4.8 4.5 4.6 4.7 4.6 4.7 5 4.7 4.7 5 4.5 4.1 5 staffed team
Caring attitude 4.6 4.6 4.6 4.6 4.6 4.7 4.3 4.8 4.7 4.5 4.7 5 4.7 4.6 5 4.3 4 4.4
Seeks reconciliation 4.6 4.6 4.6 4.5 4.6 4.7 4.3 4.6 4.7 4.4 4.7 4.8 4.8 4.7 4.6 4.4 3.7 4.2 of the parties
Highlights 4.6 4.6 4.6 4.5 4.6 4.7 4.3 4.5 4.6 4.4 4.6 5 4.4 4.5 4.5 4.2 3.8 4.8 the importance of customer interests
A reliable entity 4.5 4.5 4.5 4.4 4.5 4.6 4.3 4.5 4.6 4.3 4.6 4.7 4.3 4.4 4.2 4.3 3.7 4.4
An impartial entity 4.5 4.5 4.5 4.4 4.5 4.6 4.2 4.5 4.6 4.3 4.6 4.5 4.4 4.4 4.6 4.3 3.6 4.5
Acts promptly 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.4 4.4 4.6 4.4 4.2 4.4 4.6 4.3 4.9 4 5
Difference is statistically significant
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How Do Our Customers Evaluate Us? The average customer service on a 5-point scale has scored 4.9, with carefulness, friendliness and compe- tence receiving the highest score.
Feature All Yerevan Regions Women Men respondents
Specialist’s friendliness 4.9 4.9 4.9 4.9 4.9
Specialist’s competence 4.9 4.9 4.9 4.8 4.9
Speaking manners 4.9 4.9 4.9 4.9 4.9
Ability to keep confidential 4.9 4.9 4.8 4.9 4.9
Willing to help 4.8 4.8 4.7 4.9 4.8
Openness to action 4.8 4.7 4.8 4.8 4.8 (explaining what has to be done)
Specialist’s impartiality 4.8 4.8 4.8 4.9 4.8 and even-handedness
Specialist’s objectivity 4.8 4.9 4.8 4.8 4.8
Service promptness 4.7 4.7 4.7 4.8 4.7
Effectiveness of information provided 4.7 4.7 4.8 4.8 4.7
Seeking to reach reconciliation 4.7 4.7 4.7 4.7 4.7 between the parties
Ability to offer a solution beneficial to all 4.6 4.6 4.6 4.7 4.6
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How Do Our Customers Evaluate Us? The measure such as Net Promoter Score (Net pro- their acquaintances and friends to use the services of moter score: NPS = Promoters (%) - Detractors (%) for the Office of Financial System Mediator. the Office of Financial System Mediator has been con- sidered in the survey. As much as 75% of all respon- The probability to recommend index is 58% (a scale of dents mentioned that they are ready to recommend 32 to 62 is considered high score).
Detractors Neutrals Promoters
0 1 2 3 4 5 6 7 8 9 10
Recommending to Use the Services of the Mediator Office Index
Mediator Average Office (0-10) NPS (%) Promoters (%) Neutrals (%) Detractors (%)
58 8.5 75 8 17
International indicators on recommending in the field of services index (banks)
17 32 62
Low Medium High
Average indicator on recommending in the field of communications in Armenia (%)
47
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How Do Our Customers Evaluate Us? Statistics of claims Statistics OF CLAIMS, 2017 to the 2016 results, of the claims settled out in fa- vor of the client, 55.55% were with an outcome of • In 2017, the Office of FSM received a total of reconciliation; in 2015, 2014, 2013, 2012, 2011, 2010 5,020 complaints, 87.01% of which (4,372) con- and 2009 these indicators were 56.32%, 61.30%, stitute the ones relating to the financial sec- 79.70%, 73.36%, 70.50%, 59.10% and 61.00%, res- tor. Of these 4,372 complaints relevant to the pectively. financial sector, 3,061 were eligible for review by the Mediator. A total of 1,311 complaints filed • In monetary terms, a total AMD 206,720,967 was against financial organizations but not eligi- compensated through the mediation of the Of- ble for review by the Mediator were associa- fice of FSM in favor of the clients during 2017. This ted with the events occurred before the Law figure does not consider the cases, which were on the Financial System Mediator has entered settled out with no money actually reimbursed into force; some of the claims ended up with to the client but rather seeking to satisfy ano- a court writ issued or with the case pending ther claim of theirs, for example, by changing the in court proceedings; in other cases, the party terms in the loan contract or having an overdue having applied has not been qualified as client. loan re-classified in favor of the client, and so on. In the remaining cases, the complaints were of The largest compensation was AMD 5,113,500 and a general nature and did not virtually contain the smallest, AMD 300. In 2016, the total amount property-related claims. of compensation was AMD 188,897,125; in 2015, AMD 198,369,625; in 2014, AMD 199,147,628; in • The specialists of the Office of FSM provided ad- 2013, AMD 204,578,416; in 2012, AMD 134,087,137; vice to the clients, helped them write their com- in 2011, AMD 58,137,847; in 2010, AMD 29,264,354 plaints against financial organizations in question and in 2009, AMD 26,062,886. while explaining their rights and responsibilities. Based on the 2017 results, 93 complaints (3.04%) • Of 3,061 complaints submitted to the Office of out of a total 3,061 eligible for review were FSM, which were relevant to financial organiza- given a positive outcome by the organizations, tions and subject to be examined by the Media- without having to file a request in writing to the tor, 1,672 complaints (54.62% of the complaints Mediator. Note that the above-mentioned indi- eligible for examination) were accepted for exa- cator was 9.47% (283 complaints out of 2,989) in mination in 2017; 1,523 (50.95%) complaints out 2016; 4,91% (131 complaints out of 2,668) in 2015; of 2,989 in 2016; 1,448 (54.27%) complaints out 4.87% (130 complaints out of 2,667) in 2014; 5.65% of 2,668 in 2015; 1,276 (47.84%) complaints out (92 complaints out of 1,627) in 2013; 2.73% (26 com- of 2,667 in 2014; 818 (50.28%) complaints out of plaints out of 951) in 2012; 7.80% (43 complaints out 1,627 in 2013; 392 (41.22%) complaints out of 951 in of 551) in 2011; 14.70% (66 complaints out of 450) 2012; 144 (26.13%) complaints out of 551 in 2011; 110 in 2010 and 20.41% (40 complaints out of 196) (24.44%) complaints out of 450 in 2010; and 57 in 2009. (29.08%) complaints out of 196 in 2009.
• As much as 1,672 complaints out of 3,061 were • In the year under review, complaints filed against accepted by the Office of FSM for examination insurance companies accounted for 52.84% in all in 2017, and 80.91% of which were settled out in complaints submitted, with claims relevant to favor of the client. Note that 49.60% of the claims motor third partly liability insurance contracts settled out in favor of the client ended up with being the largest share, 91.77%, in the complaints reconciliation of the parties involved. According filed against insurance companies. Most clients
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Statistics of Claims did not agree with the estimated amount of damage, as well as many complaints were re- ceived in connection with non-compensation of the damage, delayed compensation and/or sub- rogation.
34
Statistics of Claims Statistics, general profile
The number of complaints received by the Office during 2017, by quarter: The number of complaints related to financial system
1300
1000
500
1135 1046 967 1224 0
I quarter II quarter III quarter IV quarter
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Statistics of Claims The number of complaints received by the Office during 2017, by month: The number of complaints related to financial system
450
311 392 431 318 417 311 270 357 340 374 435 416 0
January February March April May June July August September October November December
The number of claims received by the Office during 2017, by quarter: The number of claims
500
471 461 315 425 0
I quarter II quarter III quarter IV quarter
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Statistics of Claims The number of claims received by the Office during 2017, by month: The number of claims
0 200
January 101
February 172
March 198
April 147
May 177
June 137
July 87
August 109
September 119
October 132
November 126
December 167
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Statistics of Claims The number of complaints filed to and claims received for review by the Office during 2017, by quarter
1200 The number of complaints to financial system received 1000 by the Office during 2017
The number of claims 800 received by the Office during 2017 600
400
200 1135 471 1046 461 967 315 1224 425 0
I quarter II quarter III quarter IV quarter
Total number of complaints received during 2017, o/w: 5,020
Number of complaints to financial system 4,372
• Not eligible for review by Mediator 1,311
• Eligible for review by Mediator 3,061
Resolved based on complaint/claim filed against the organization in question 93
Taken in for review upon presentation of a claim in writing 1,672
• Claim satisfied through reconciliation 599
• Claim declined 285
• Claim partially satisfied 556
• Review of the claim suspended 177
• Claim satisfied 53
• Review of the claim declined 2
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Statistics of Claims Results/outcome of review of complaints/claims, by percent:
35.83% 33.25% 17.05% 10.59% 3.17% 0.12%
Claim satisfied through reconciliation Claim declined Claim satisfied Review of the claim suspended Claim partially satisfied Reviews declined
Cases declined and cases settled Claims settled down in favor down in favor of the client, of the client, by percent: presented as a ratio:
80.91% 19.09% 49.59% 46.06% 4.39%
Claim satisfied through reconciliation Claims settled down in favor of the client Claim partially satisfied Claims declined Claim satisfied
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Statistics of Claims Complaints, by type of organizations:
Number of complaints to financial system received during 2017, 4,372 100% which were filed against:
Banks 1,662 38.01%
Insurance companies 2,310 52.84%
Credit Organizations 176 4.03%
Pawnshops 8 0.18%
Armenian Motor Insurers’ Bureau 30 0.69%
Payment and settlement organizations making remittances 11 0.25%
Credit Bureau 9 0.21%
Central Depository of Armenia 3 0.07%
Other financial institutions 163 3.73%
Share of complaints filed against financial organizations in 2017 in the total number of complaints presented to the Office:
52.84% 38.01% 4.03% 3.73% 0.69% 0.25% 0.21% 0.18% 0.07%
Armenian Motor Insurers’ Bureau Payment and settlement organizations Banks making remittances Insurance companies Credit Bureau Credit Organizations Central Depository Pawnshops Other financial institutions
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Statistics of Claims Claims reviewed, by type of organizations:
Total number of claims in writing during 2017, 1,672 100 % which were filed against
Insurance companies 1,358 81.22%
Banks 270 16.15%
Armenian Motor Insurers’ Bureau 15 0.90%
Credit organizations 22 1.32%
Pawnshops 1 0.06%
Credit Bureau 1 0.06%
Central Depository of Armenia 1 0.06%
Payment and settlement organizations making remittances 4 0.24%
Share of claims filed against selected financial organizations in total complaints accepted by the Office for review in 2017:
81.22% 16.15% 1.32% 0.90% 0.24% 0.06% 0.06% 0.06%
Insurance companies Banks Credit organizations Armenian Motor Insurers’ Bureau Pawnshops Credit Bureau Central Depository Payment and settlement organizations making remittances
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Statistics of Claims Content of claims filed against banks:
Total number of claims in writing filed against banks during 270 100% 2017 in connection with:
Credit operations 185 68.52%
Payment and settlement transactions 40 14.81%
Depositary operations 35 12.96%
Other 10 3.70%
68.52% 14.81% 12.96% 3.70%
Credit operations Payment and settlement transactions Depositary operations Other
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Statistics of Claims Content of claims filed against insurance companies and the Armenian Motor Insurers’ Bureau:
Total number of claims in writing during 2017, which were filed against 1,373 100% insurance companies and Armenian Motor Insurers’ Bureau, including
Vehicle insurance 44 3.20%
Medical insurance 27 1.97%
Travel insurance 10 0.73%
Accidents insurance 2 0.15%
Property insurance 13 0.95%
Mandatory car insurance contracts (including Armenian Motor Insurers’ Bureau) 1,271 92.57%
Voluntary MTPL 6 0.44%
92.57% 3.20% 1.97% 0.95% 0.73% 0.44% 0.15%
Vehicle insurance Medical insurance Travel insurance Accidents insurance Property insurance Mandatory car insurance contracts (including Armenian Motor Insurers’ Bureau) Voluntary MTPL
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Statistics of Claims Reimbursement:
Total value of Client reimbursement 206,720,967 100% during 2017, including:
Reimbursement on claims against banks 36,308,102 17.56%
Reimbursement on claims against insurance companies 168,138,859 81.34%
Reimbursement on claims against credit organizations 670,688 0.32%
Reimbursement on claims against Armenian Motor Insurers’ Bureau 1,523,318 0.74%
Reimbursement on claims against Payment and settlement 80,000 0.04% organizations making remittances
Share of reimbursements as a result of review of the claims filed against financial institutions in total indemnification provided to the clients in 2017
Reimbursement on claims against 17.56% banks 81.34% Reimbursement on claims against 0.32% insurance companies 0.74% Reimbursement on claims against 0.04% credit companies Reimbursement on claims against Armenian Motor Insurers’ Bureau During 2017: Reimbursement on claims against Payment and settlement organizations 80.91% of the cases reviewed were settled in favor of the client; making remittances
49.60% of the claims settled out in favor of the client ended up with reconciliation of the parties involved
• the largest compensation – AMD 5,113,500;
• the smallest compensation – AMD 300.
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Statistics of Claims Share of claims, which were settled in favor of the client, in total claims, by year:
82
80
78
76
74
72
70
68
66
64
62
66.4% 68.75% 67.69% 72.14% 70.44% 76.91% 77.79% 78.71% 80.91%
60
2009 2010 2011 2012 2013 2014 2015 2016 2017
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Statistics of Claims Share of claims, which were settled in favor of the client, in selected financial institutions claims (%):
100
90
80
70
60
50
40
30
20
10
69.47% 82.95% 53.85% 100.0% 100.0% 100.0% 100.0%
0
Banks Pawnshops Insurance Companies Central Depository Credit Institutions Payment and settlement organizations making Armenian Motor Insurers’ Bureau remittances
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Statistics of Claims Dynamic analysis of some indicators The number of complaints received by the Office in 2009-2017, by quarter:
0 1300 67 185 213 249 446 850 819 956
I quarter 1135 80 164 185 345 422 723 771 1054
II quarter 1046 86 128 212 379 445 741 828 1009
III quarter 967 161 2009 165 2010 193 2011 338 2012 690 2013 930 2014 845 2015 2016 1099 2017 IV quarter 1224
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Statistics of Claims The number of complaints filed to and claims received for review by the Office in 2009-2017, by year:
4500
4000
3500
3000
2500
2000
1500
1000
500
378 57 642 110 803 144 1311 392 2003 818 3244 1276 3263 1448 4118 1523 4372 1672
0
2009 2010 2011 2012 2013 2014 2015 2016 2017
The number of complaints related to financial system The number of claims
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Statistics of Claims The number of complaints received by the Office in 2009-2017, by type of financial institutions:
0 2500
252 419 434 509 706 1029 1114 1418
Banks 1662
54 63 252 689 1142 2014 1964 2336
Insurance Companies 2310 46 75 60 48 48 71 88 162
Credit Institutions 176
26 85 2009 57 2010 2011 65 2012 107 2013 130 2014 97 2015 202 2016 Other 224 2017
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Statistics of Claims Client reimbursement in 2009-2017: Client reimbursement (AMD)
250 000 000
200 000 000
150 000 000
100 000 000
50 000 000
26 062 886 29 264 354 58 137 847 134 087 137 204 578 416 199 147 628 198 369 625 188 897 125 206 720 967
0
2009 2010 2011 2012 2013 2014 2015 2016 2017
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Statistics of Claims Table of Contents
2 Board Chairman’s Address
3 Financial System Mediator’s Address
4 The Office of Financial System Mediator
8 2017 Major Events
18 Programs Implemented in 2017
24 Activities Planned for 2018
26 How Do Our Customers Evaluate Us?
32 Statistics of Claims
52 Financial Statement and Audit Opinion
60 Precedents/Exemplary Cases
84 Acknowledgements
88 List of Organizations Which did not Sign the Covenant FINANCIAL STATEMENT AND AUDIT OPINION 53
Financial Statement and Audit Opinion 54
Financial Statement and Audit Opinion 55
Financial Statement and Audit Opinion 56
Financial Statement and Audit Opinion 57
Financial Statement and Audit Opinion 58
Financial Statement and Audit Opinion Table of Contents
2 Board Chairman’s Address
3 Financial System Mediator’s Address
4 The Office of Financial System Mediator
8 2017 Major Events
18 Programs Implemented in 2017
24 Activities Planned for 2018
26 How Do Our Customers Evaluate Us?
32 Statistics of Claims
52 Financial Statement and Audit Opinion
60 Precedents/Exemplary Cases
84 Acknowledgements
88 List of Organizations Which did not Sign the Covenant PRECEDENTS/ EXEMPLARY CASES Based on the statement above, the Bank has turned down the Client’s request.
Thus, the comprehensive review of the claim-related Case 1 documentation, explanations and objections deli- vered by the parties, as well as reference to the legis- lation requirements led the Mediator to conclude as follows: Problem in connection with cash withdrawal from card account A series of articles of the Republic of Armenia Civ- il Code and relevant regulatory acts adopted by the Board of the Central Bank imply that under the con- The Client is a cardholder of the Bank. In March of tract of bank account, the bank is obliged to execute 2017, the Client wanted to withdraw cash from an the orders of the client for carrying out a variety of ATM near the railway station “Sasuntsi Davit” of transactions through the account. Such transactions Yerevan, but the ATM returned the payment card include the provision of cash from the account. This without giving the requested cash. Waiting for ano- clause of the Civil Code of the Republic of Armenia ther minute, the Client left the ATM, however, has a more specific coverage in paragraph 23 of the thinking that the ATM did not have enough money Central Bank Board Resolution No. 300-N, dated to dispense. A few minutes later, an SMS message 04.11.2014., which gives cardholders the right to ma- followed, saying to the Client that the cash was nage their cash flows in cash and non-cash. This right withdrawn from his account, in the amount reques- of the Cardholder goes hand in hand with the statu- ted at the ATM. On the same day, the Client checked tory commitment as defined under the same Reso- the account balance with another ATM of the Bank lution, which says that banks operating in the terri- only to find whether had reduced to the amount of tory of the Republic of Armenia shall make sure the withdrawal requested at the ATM. In order to clari- transactions for cash withdrawal from card account fy the issue, the Client visited a branch office of the are in place. Moreover, banks are given the possibi- Bank and filed a petition for failed transaction. The lity to carry out financial transactions, including the Client noted that he did not receive any written ex- provision of cash from card account, through the au- planation, clarification, but was informed verbally tomatic self-service machines as well, and the ATMs that the problem could have been of technical na- which are considered a type of such machines can be ture. A few days later, the Client received a phone accessed by customers who will use their payment call from the Bank telling that what they learned cards or other means of identification to withdraw from decoding of the ATMs was that the cash had cash, make money transfers, pay against services, and been withdrawn. The Client has filed a claim to the benefit other transactions or services a bank officer Bank and received a written response by which the would otherwise provide. In other words, through Bank turned down the claim. the ATM, the bank performs its duty of provision of cash to the Cardholder from a card account. In connection with the claim, the Bank noted that they had opened a Visa Electron card account for For further investigation, the transaction logs were the Client as per his application for issuing and ser- sent to several ATM servicemen who have examined vicing a debit card presented to the Bank. The Cli- them and concluded afterwards that the log did not ent has made a cash withdrawal through an ATM of feature the information on withdrawal of cash bank- the Bank, which has been offset from the account. notes from the ATM by the Client.
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Precedents/Exemplary Cases As to other possible evidence in support of the Bank been among the rejected transactions and that the insisting on the fact that the Client has taken the Client had actually withdrawn the amount from the money out of the ATM, the following should be ATM and that the ATM had not swallowed the spe- mentioned: cified amount and classified it as a rejected transac- tion. The sum of rejected transactions exceeded the In order to find out whether the Client or any third amount of the transaction executed by the Client party has taken the money out of the ATM, the Me- and no proof of the fact that the Bank had placed diator has obtained a video recording of the trans- the transaction into rejected transactions was pro- action from the Bank, in which, however, what vided, so the amount received by the Client from the is only visible is the Client’s face. That part of the ATM is not clear from the analysis of the cash collec- ATM, which the cash comes out from and where tion act submitted by the Bank, either. the Client could take it from, does not appear in the recorded video, which makes it not possible to Thus, to sum up, it should be mentioned that the understand whether or not the Client has taken Bank must justify the existence of the Client’s order the money. According to the aforementioned reso- and the fact that the amount has been provided to lution of the Board of the Central Bank, the ATM’s the Client or another person as indicated by him video surveillance system should have been set in for writing the funds off the Client’s account. In this such a way so that at least three images suitable case, the Bank fails to prove, through any document for viewing were to be recorded. This means that, or deliverable it presented, that the amount has in the context of the resolution, the Bank ought to been provided to the Client upon the Client’s order, have the camera placed on the ATM in such a way which implies that the Bank has breached the obli- so as to allow to understand whether or not the gation of providing cash from the card account (has Client or any other person had actually taken the unreasonably deducted the funds from the Client’s money from watching the recorded video. Because account). Based on what has been stated above, the it is only the Client’s face that appears in the vi- Mediator believes that the amount, which the Client deo, the Bank has transgressed the requirements claimed to receive from the Bank must be returned to the video surveillance system for the ATM, which to the Client. makes it impossible to determine, via a recorded video, if the money was taken. That is, even though In view of the statement mentioned above, by vir- a recorded video is in place, the Bank fails to prove tue of Article 14 (1) of the Republic of Armenia Law the fact that the Client has received the money on the Financial System Mediator, the Mediator has in question. It is also worth mentioning that the made a decision to satisfy the Client’s claim against Client’s facial expression, the behavior, so displayed the Bank. in the video, and the fact of complaint made at the branch office of the Bank a few minutes after the transaction can also indicate that the Client did not actually receive the money requested.
At the same time, the cash collection act provid- ed by the Bank shows that there were a number of transactions rejected by the ATM as of the day of the transaction. In the examination of the claim, the Bank failed to provide evidence by which they could verify that the Client’s transaction had not
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Precedents/Exemplary Cases establishes that the deposit will be extended on the same terms and conditions unless called back with- in the timeframe set by the Contract. The Bank no- ted that the deposit contract had been prolonged at Case 2 the time. The Depositor, said the Bank, has put the money under the Child Deposit Scheme in favor of a third party. The contract terminated at the Deposi- tor’s request and the deposit money was returned Failure to provide the deposit amount in favor of to the latter, since Article 910 of the Republic of Ar- the third party menia Civil Code establishes that the party having signed a deposit contract may enjoy the depositor rights in respect of the funds available on his ac- The Client is a third party under the deposit con- count before the third person’s intention to use the tract in favor of whom the deposit has been invest- depositor rights shall have been announced. Accor- ed. The depositor died, and the Client applied to the ding to the Bank, the Client turned to the Bank with Bank after his death to claim the deposit put in fa- a power of attorney in order to receive the amount vor of him but received the Bank’s rejection with of local currency deposit, but the transaction was a reasoning that he would need to present a nota- denied because of the expired power of attorney. rized certificate of inheritance. The Client does not The Bank noted that taking into consideration the agree with the Bank’s decision as the deposit has information on the death of the Depositor received been invested in favor of him and he has no relation from the authorized person, the employee informed to the inheritance. The Client noted that he is now that the amount of the deposit might be provided to a grown-up and wants to take the deposit, which the Client’s heirs only after a relevant certificate of has been invested in his favor, so the Bank has no le- inheritance would have been submitted. In this case, gal footing to reject. According to the Client, a con- notes the Bank, the Client’s complaint is groundless tract of term deposit in Armenian dram has been because the Child Deposit Scheme has ceased while signed to establish that the amount of deposit plus the other deposit may be issued after the inheri- interests are invested as a deposit, yet the Bank’s tance document is submitted. employee assured that it was just a prolongation of the child deposit. The Client noted that he is now The Bank provided support documentation such as unable to get back the deposit put on his behalf as, the person’s time deposit contract, statement to the according to the Bank, there is no deposit contract account, payment order, memorandum, letter of com- signed in his name. The Client has filed a complaint plaint submitted to the Bank and the response thereto. to the Bank and received their rejection. In a letter to the Mediator, the Client demanded that the Bank During the examination of the claim, the Office return the amount of deposit plus any interests ac- of Mediator asked the Bank to submit the memo- crued thereon. randum, signed by the Client, to ascertain that the Client has received money from the Bank. The As the Bank noted in connection with the Client’s Bank, however, noted that the memorandum could claim, there was a contract of term deposit in Arme- not be submitted due to its storing in the archives. nian dram signed between the Bank and the Depo- What has been submitted was a printout of the sitor as a natural person. According to the contract, Bank’s internal electronic communication from the Depositor has invested money with the Bank which it appears that the money had been handed for a specific term. Paragraph 1.5 of the Contract over to the Client.
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Precedents/Exemplary Cases Thus, a comprehensive review of the claim-related obligation to accrue interest on the deposit; and (b) documentation as well as reference to the legislation the obligation to repay the amount of deposit and requirements led the Mediator to conclude as follows: interest accrued thereon. In the absence of the de- positor’s request to return the amount of deposit In this case, in particular, the Bank and the Depositor and interest accrued thereon at the end of the term have entered into two deposit contracts, the Dram of the deposit contract, the bank’s obligation will Deposit Contract and the Third-Party Deposit Con- terminate only with regard to the accrual of inte- tract. The Dram Deposit Contract is not signed in rest on the deposit as defined under the contract, and favor of a third party, i.e. the Client, therefore the more specifically, the size of interest will change – Bank had an obligation to return it to the depositor, unless otherwise stipulated by the contract, the Hamlet Karapetyan, and to his heirs after his death, interest will continue accruing by the terms of in the manner prescribed in Article 70 of the Repub- a demand deposit, otherwise, by the terms and con- lic of Armenia Civil Code. This means that the Client ditions set forth in the contract. Expiration of the has no right to make a claim over that amount sin- term of the contract and absence of depositor’s re- gle-handedly but rather do it together with all the quest to return the deposit are those conditions un- depositor’s heirs. der which the bank is entitled to unilaterally change the amount of interest accrued on deposit in case As regards the Client’s demand to return the amount the contract is to be extended. The bank may either of deposit, which has been invested with the Bank use the statutory right to reduce the interest rate or under the third-party deposit contract, we need to withhold from doing so by setting other condition(s) admit that the Bank did not provide any evidence under the contract. This is the only unfavorable im- that the depositor demanded a return of the inves- plication of the law the depositor may suffer for ted amount during or after expiration of the period being less careful or indecisive after the expiration of validity of the Contract signed in favor of the third of term of the deposit contract. The bank’s obliga- party. After the expiration of the contract, the third tion to return the amount of deposit plus interest party, i.e. the Client, has come to the Bank to receive accrued thereon (including the obligation for accru- the amount invested on his behalf, but the Bank has al of interests by the terms of a demand deposit or refused to provide it, reasoning that the Client failed other terms specified in the contract after the end to disclose his right to use the deposit before the of the term of contract) shall terminate only after expiration of the contract, and now the term of the these shall have been returned (paid back) to the Contract had expired and the Depositor has died, depositor at the latter’s request, that is, after the so the amount invested with the Bank under the bank shall have properly fulfilled its commitment in third-party deposit contract must be returned to the respect of the deposit. heirs of the Depositor. As regards this particular case, paragraph 4.1 of the Thus, normally, in order for a bank to fulfill its com- Deposit Contract concluded between the Bank and mitment in respect of the term deposit contract, the Depositor in favor of the Third Party establi- the following two conditions must altogether be in shes that unless claimed back within the timeframe place: (a) expired term of the contract (unless the specified by the contract, the deposit will continue depositor has requested a return of the amount of on the same conditions, while the interest rate is set deposit and interest accrued thereon before the end to be the Bank’s interest rate applied to that type of the term), and b) the depositor’s request to return of deposit at the time of prolongation. In fact, it has the deposit. Furthermore, the Bank’s commitment been established that because the depositor has not assumed under the deposit contract imply: (a) the requested a return of the deposit at the end of the
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Precedents/Exemplary Cases term of the contract, it will extend its term on the bank immediate return of the sum of the deposit, same conditions, except for the interest rate, which also payment of interest on it at the rate determined will be the interest rate applied to that type of de- in accordance with Paragraph 1 of Article 906 of the posit at the Bank, which means that all other terms Code, and compensation for losses caused. of the contract, including that of invested in favor of a third party, continue until the Bank has fulfilled its Thus, summing up what has been stated above, as obligations under the deposit contract. well as adhering to the requirements of the proce- dural rules defined under Article 11 of the Republic Subject to a third-party deposit contract, the Bank of Armenia Law on the Financial System Mediator, has undertaken commitment in respect of the third and by reference to the provisions of the Republic party for returning the amount of deposit and in- of Armenia Civil Code, the Mediator has decided to terest accrued thereon at the first demand of such partially satisfy the Client’s claim against the Bank. third party, unless the Party having concluded the Deposit Contract with the Bank has requested the Bank to return the Deposit before the Third Party has informed the Bank of its willingness to exer- cise its rights as depositor. The Third Party, as men- tioned in the deposit contract, shall acquire the rights of the depositor, subject to the provisions of Articles 905 and 446 of the Republic of Armenia Civil Code, from the moment it shall have made first request to the Bank or it shall have informed the Bank by any other means of its intention to exer- cise the rights arising out of the deposit contract, whereas the Party having signed the Deposit Con- tract with the Bank shall lose the rights of reques- ting the Bank to return the amount of deposit and interest accrued thereon to the Third Party, unless it has exercised its rights as depositor before the third party shall have expressed its intention to use its rights as depositor. In other words, a third party may make a claim before the bank for using the rights of a depositor as long as commitment arising out of the deposit contract remains unfulfilled or, to put it simply, unless the person having signed a deposit contract with the bank has not requested a return of the amount of deposit.
Article 908 (4) of the Civil Code provides that upon failure by the bank to perform duties provided by a statute or the contract of bank deposit for se- curing the return of the deposit and also in case of loss of security or worsening of its conditions, the depositor shall have the right to demand from the
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Precedents/Exemplary Cases applied to the transactions, which the Client carried out; moreover, such terms and tariffs were avai- lable in the Bank’s official website, in the subpage “Individuals/Cards/Debit cards/Visa Electron”. The Case 3 Bank has charged the Client for cash withdrawal in accordance with an established Tariffs table, which amounted to 1% both at the time of signing the contract and at the time of investigating the case, Disagreement with a tariff on cash withdrawal so the Bank’s actions were legitimate. The Bank from card account noted that the Client’s claim was groundless and not subject to satisfaction.
The contract on issuance and usage of payment card According to Article 912 (1) of the Republic of Ar- signed between the Client and the Bank has pro- menia Civil Code, under the contract of bank ac- vided the Client with a Visa Electron payment card. count, a bank is obligated to credit monetary funds When attempting a card transaction at a branch of- on to the account opened with the client (the ac- fice of the Bank, the Client was advised by the staff countholder), to execute the orders of the client on that, for cash withdrawal, a 1% tariff rate would be transfer and issuance of respective amounts from applied to that transaction. For clarification, the Cli- the account and on carrying out other operations ent took an account statement for the whole pe- through the account. Article 919 of the Civil Code riod to find out that the Bank has always applied says that in cases provided by the contract of bank the same tariff of 1%. The Client voices disagreement account, the client shall pay for the services of the with the abovementioned actions of the Bank, as bank for operations with monetary funds through upon signing the contract he has been informed of the account; payment for the services of the bank a 0.3% tariff rate applied to a cash withdrawal tran- as provided for herewith may be deducted by saction. Moreover, neither the contract nor the Bank’s a bank from the monetary funds of a client (the ac- website have mentioned about the 1% tariff rate for countholder) that are on the account after the end such transaction. The Client filed a complaint to the of each transaction unless otherwise provided for Bank but did not receive any response therefrom. In by the contract of bank account. a letter to the Mediator, the Client demanded that the Bank refund the fees overcharged. While examining the claim it was found out that there has been a Contract on Issuance and Usage In response, the Bank noted that, subject to para- of Payment Card, signed between the Client and graphs 2.4.3 and 3.1 of the “Contract on Issuance and the Bank. Paragraph 1.1 of the Contract provides Usage of Payment Card” signed between the Bank that the Contract regulates the relationship be- and the Client, the Client has read and agreed to tween the Bank and the Cardholder (Client) when pay to the Bank the Fees payable under the Bank’s using the Payment Card by the Cardholder (Client) Tariffs and the Contract. Paragraph 2.1.1 of the Con- as a means of payment. According to paragraph 2.1.1 tract specifies that the Bank is entitled to charge of the Contract, the Bank is entitled to charge, in- commissions and other such fees from the Card- disputably, commission fees from the Cardholder's holder’s card account. The Client, the Bank noted, (Client’s) card account, in the duration of validity of was a non-resident customer to the Bank, there- the card, for issuance and servicing of the card, as fore the terms and tariffs for issuance and servi- well as all other costs arisen out of the card usage, cing of debit cards for non-resident customers were subject to the Tariffs and the Contract. According
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Precedents/Exemplary Cases to paragraph 2.4.3 of the Contract, the Cardholder transaction of cash withdrawal at the Bank’s cash (Client) undertakes to pay the fees, subject to the dispenser outlets and ATMs. The Mediator believes Tariffs and the Contract, including penalties, in the the Bank has not violated the Client’s rights, conse- event of a surcharge on the Card Account. Even- quently, the Client’s claim is groundless and subject tually, paragraph 3.1 of the Contract contains the to refusal. verification of the Cardholder that he has read the Tariffs, has received a copy of the Rules and Infor- Based on what has been stated above, as well as by mation Bulletin, has agreed to the requirements virtue of Article 14 (1) of the Republic of Armenia Law thereof and has undertaken to follow them. on the Financial System Mediator, the Mediator has made a decision to reject the Client’s claim against The Bank’s “Tariffs and Rates”, which the Executive the Bank. Board of the Bank has approved in a new edition establishes that a 1% rate is chargeable to non-resi- dent customers as they withdraw cash at the Bank’s cash dispenser outlets and ATMs by using their Visa Electron cards. According to information available on the official website of the Bank, non-resident cus- tomers are charged 1% commission fee when they use their Visa Electron cards for withdrawal of cash at the Bank’s cash dispenser outlets and ATMs.
While examining this case, it was found out that in the application submitted for signing the Contract, the Client had indicated his status as non-resident; moreover, as both the Client and the Bank informed, the Client had presented the passport provided by the Islamic Republic of Iran. In other words, the Client has justified the fact that he is a non-resident, and in such circumstances, the Tariffs for non-resident customers would apply to the Client.
Under the Contract, the Client shall pay the Tariffs as defined by the Tariffs table, which he has read upon signing the Contract. Subject to the Tariffs of the Bank, there applies a 1% commission fee to non-resident customers when they use their Visa Electron cards for withdrawal of cash at the Bank’s cash dispenser outlets and ATMs, this is why the Bank has charged the Client a 1% commission fee.
Therefore, the Mediator records that, under the Contract signed between the Client and the Bank and subject to the Tariffs table of the Bank, the Client should have charged 1.0% commission fee per
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Precedents/Exemplary Cases International Payment System Appeal Rules, cannot be deemed as fraudulent deals. Taking the fore- going into consideration, the Bank has filed an appeal for 15 transactions with the only possible option – Case 4 making a point that those card transactions had been executed through magnetic tape reading, rather than through the microprocessor reading. The number of such appeals has been limited to Payment card fraud case 15 transactions (subject to the MasterCard tran- saction rules), this is why one transaction remained non-appealed. Following the appeal, the Bank has According to a contract signed between the Client received responses from foreign banks in respect of and the Bank, the Client has been granted a Mas- 14 transactions, which clearly show that transac- terCard Gold payment card. The Client has received tions were made using a card and correctly entered short messages from the ArCa, a local payment PIN code. In addition, they pinpointed the fact that system and settlement service, according to which the country had not yet switched to a mandatory many transactions have been made through his ac- requirement to microprocessor reading of the card count, for which approximately USD 2,700 had been data. Attached to the letter, the Bank submitted charged from his account. The Client noted that he a copy of the complaint, the copies of the Bank’s has not executed such transactions nor had he an response, the card issuance agreement and the let- idea of who could have done so. To find out what ter of request, the letter of complaint for card with happened, the Client filed an application to the Bank a statement enclosed, and the copies of an appeal asking them to clarify the situation and recompense procedure and other documentation. the sums charged from him. In response to the Client’s request, the Bank agreed to refund USD 223.86 The Office of Mediator has received a letter from the but refused refunding the rest sum of USD 2,476, rea- Bank, which stated as follows: soning that these transactions were made in com- pliance with the safety rules. The Client noted that he 1. There is no separate document describing the did not agree with the Bank’s decision, as he did not terms and conditions. All provisions are included execute the other transactions, either, further clai- in the contract. ming that the sums were deducted from his account without his knowledge and will. The Client filed 2. The SmartVista System statement and transac- a complaint, but received a response of rejection. tion details have been presented.
In a letter to the Mediator, the Client demanded that 3. The card servicing terms are defined under terms & the Bank refund him USD 2,476, which has been un- conditions of the contract. reasonably charged from his account. 4. There is no separate document that describes With regard to the claim, the Bank wrote that their the sequence of steps for an appeal process. staff conducted a review of 16 transactions, which the Client mentioned in the letter of complaint 5. There is no recorded conversation on the phone. to the Bank. What they revealed was that all the transactions were made through ATMs, using a PIN 6. The date on which the Client’s card has been is- code and a card, which, subject to the MasterCard sued is July 2016, which is valid until July 2021.
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Precedents/Exemplary Cases 7. The deals have been recognized by the Fraud Monitoring System as suspicious transactions that took place during non-working hours (06.50-07.30). Case 5 8. There has been a technical failure to the Bank’s software program, that is why the Client’s card account statement showed VND 50,000.00 in- stead of VND 5,000,000. Disagreement with the size of liabilities under the loan contract 099845830 In the process of claim examination the Mediator ini- tiated negotiations between the parties, as a result of which the Bank and the Client signed a reconci- The Client has been a customer of the Bank. Because liation covenant, by which the Bank agreed to pay of the Client’s liabilities fallen outstanding, the Bank USD 742 to the Client as compensation for the loss has applied for judicial protection. Subject to the caused by card fraud. court decision, a total of AMD 295,199.20 has been confiscated from the Client in favor of the Bank. As Subject to clause 1.1 of Section VII ‘Investigation of the Client noted, the court issued a writ of execution Claims’ of the “Rules that Govern the Acceptance to the effect of which the Client paid AMD 297,000. and Review of Claims by the Office of Financial Sys- Following this, the Client says, the Bank issued tem Mediator”, as approved under the Decision No. a statement according to which an obligation out- 6, dated 27.01.2009, of the Board of Trustees of the standing on a loan of AMD 220,973.30 was still due Office of Financial System Mediator, if the nature of for the Client in respect of the above liability. the claim is such that all parties reach an agreement through reconciliation, without Mediator having to The Client has turned to the Bank with a request to make a binding decision, the case shall be treated as have the liabilities recalculated but the Bank refused closed only when the client has submitted a letter to do so, in response. requesting to withdraw his claim. In a letter addressed to the Mediator, the Client de- As a result, the Office of Mediator has received a re- manded that the Bank perform recalculation of the levant request from the Client whereby the latter liabilities and avoid calling for receiving more money withdraws his appeal from the Mediator, as a re- from him, as it does not fall under the court’s judg- conciliation covenant has been reached between ment and that the obligation under the said judg- him and the Bank in the amount of USD 742. ment has already been fulfilled by him.
Hence, taking into account the above-mentioned, In connection with the claim, the Bank wrote that adhering to the requirements of the procedural rules following a civil case investigated in an open-door defined under Article 11 of the Republic of Armenia session at the General Jurisdiction Court, a verdict Law on the Financial System Mediator, and by virtue has been issued to satisfy the Bank’s claim to of Article 13 (1) 4 of the Republic of Armenia Law on exact AMD 295,199.20 from the Client, of which AMD the Financial System Mediator, the Mediator has de- 180,000 as principal debt, AMD 103,734.50 as inte- cided to end the examination of the claim. rest payable, AMD 1,118.50 as surcharge on a payment limit, AMD 708 as penalty accrued on the surcharge, AMD 3,850 as debt on other commissions subject
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Precedents/Exemplary Cases to the Terms, and AMD 5,788.20 as state duty, and So, after examining the relevant documents and to have interest, at an annual rate of 48%, to accrue calculations, subject to the court judgment and the on AMD 180,000 until the day the obligation is ful- CESJA action to exact the amounts from the Client filled actually. in order to repay the debt, it was found out that the Client’s debt to the Bank should amount to AMD The Bank has attached the documents, as requested 206,105, of which: by the Mediator, to the letter. 1. balance of outstanding loan: AMD 30,937, and Thus, a comprehensive review of the claim-related documentation, as well as reference to the legisla- 2. interest penalty accrued on overdue loan: AMD tion requirements led the Mediator to conclude as 175,167. follows: Taking into consideration the above, as well as gi- Improper performance by the Client of his obligations ven that the amount of Client’s liability to the Bank, to the Bank under the Agreement has prompted the as presented by the Bank, proved smaller than the Bank to file a claim against the Client to the court, amount calculated in accordance with the court which has made a decision to satisfy the Bank’s claim. judgment, the Mediator believes that the Bank did The court has made a judgment to exact a total of not charge sums from the Client not specified under AMD 295,199.20 from the Client in favor of the Bank, of the court judgment and, consequently, the Client’s which AMD 180,000 as principal debt, AMD 103,734.50 claim is not substantiated. As regards the service as interest payable, AMD 1,118.50 as surcharge on fees as presented by the Bank, the Bank has no right a payment limit, AMD 708 as penalty accrued on the to seize them from the Client to the effect of the surcharge, AMD 3,850 as debt on other commissions court judgment and writ of execution issued pur- subject to the Terms, and AMD 5,788.20 as state duty. suant thereto. Additionally, the court has ruled that the Bank may also have interest, at an annual rate of 48%, to accrue In view of the statement mentioned above, as well on AMD 180,000 until the day the obligation is ful- as adhering to the requirements of the procedural filled actually, and have it exacted from the Client as rules defined under Article 11 of the Republic of Ar- well. The court ruling above did not set further provi- menia Law on Financial System Mediator, by refer- sions so as to seize from the Client any more money ence to the provisions of the Republic of Armenia (including credit or card account service fees) in favor Civil Code and the Republic of Armenia Civil Proce- of the Bank other than the amount determined under dure Code, and by virtue of Article 14 (1) of the Re- the above ruling, which makes up AMD 295,199.20, and public of Armenia Law on Financial System Media- the 48% rate of interest to accrue on AMD 180,000. tor, the Mediator has made a decision to turn down This means that, subject to the court ruling, the Bank the Client’s claim against the Bank. has no right to use the money, to be exacted by the CESJA and provided to the Bank, for repayment of a liability other than the one(s) determined by the judgment. The Bank has the right to use the money, to be exacted by the CESJA and provided to the Bank, solely to pay off: a) the seized principal amount of AMD 295,199.20, and b) the interest that accrues on AMD 180,000 with a 48% rate annually, in the prio- rity set by the Agreement and the law.
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Precedents/Exemplary Cases With regard to the Client’s claim, the Bank noted that the problem was, first of all, about a technical flaw, which had occurred as a result of reorganiza- tion processes. The problem was, the Bank wrote, of Case 6 a formal nature too, as the loan installments by the Client, subject to the loan contract, had been done through the account for which the Client claimed the extracts, clearly knowing the date of each loan Failure to send account statement to the installment and the amount of repayment. The Bank customer noted that the circumstance that the Client had not been a depositor was worthwhile enough to pay attention to since the Client had never applied or The Client has been a customer of Bank “A”, but af- made a claim to the Bank for receiving any extracts ter a bank merger that brought Bank “A” and Bank for his deposits and interest accrued thereon for the “B” together, now he has become a customer of entire 12 months in a row. Furthermore, the Bank’s Bank “B” (hereinafter referred to as the Bank), in position is that the amount as provided for in Article the manner prescribed by law. In view of the re- 12 (1) of the Law on Attraction of Bank Deposits can- quirements of the Armenian law and that all the not be demanded from the Bank (let alone refund- rights and obligations of customers of the uniting ed by the Bank 12 times for 12 months) just because bank are to be transferred to the surviving bank they have failed to provide the extracts for a deposit as a result of the merger, the Client has duly ful- account that is non-existent on the grounds of legal filled his obligations to the Bank but the Bank has relationship arising from a loan contract rather than not. Every month the client has received extracts a deposit contract signed between the Client and of his account statement electronically from the the Bank. So, the Bank has filed a motion to reject official e-mail address of Bank “A”, in accordance the Client’s request submitted to the Mediator. with Article 6 of the Republic of Armenia Law on Thus, a comprehensive review of the claim-related Attraction of Bank Deposits. Similarly, letters with documentation and explanations and objection de- different content (announcements, offers about livered by the parties, as well as reference to the leg- new banking products, etc.) have been sent to the islation requirements led the Mediator to conclude Client from the official e-mail address of the Bank, as follows: yet no extracts of his account statement had been provided to the Client. Cash available on the bank account is also con- sidered a bank deposit, so the contract on a bank In a letter of request submitted to the Mediator, account, which money can be credited onto is also the Client demanded that the Bank took an imme- considered a deposit contract. The only criterion diate action to remedy their violation of the rights for qualifying the contract as deposit is that the of the depositor who uses banking services, as pre- contract must have been concluded with the aim scribed by Article 6 of the Republic of Armenia Law to attract deposits. In this case, Bank “A” and the on Attraction of Bank Deposits and, once the fact Client have been tied with each other by a bank ac- of violation had been admitted and corroborated, count and loan agreement relationship. After Bank undertake the liability as provided for in Article 12 (1) “A” has merged into the Bank, the rights and obli- of the Law on Attraction of Bank Deposits, which is gations arising from the Client’s bank account and to pay a fine in the amount of AMD 300,000. loan agreements have been transferred to the Bank. The bank account agreement between the Bank and
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Precedents/Exemplary Cases the Client has allowed opening two accounts in Ar- the Client to start from the 1st of each month till menian dram and US dollar, which are not consid- the last day of that month. Interestingly, in each re- ered loan accounts, that is, these accounts are not porting period, the two accounts of the Client were intended solely for servicing the loan that had been used to post debit and credit entries, so the Bank extended to the Client. In other words, the Client would have to provide account statements for each accounts with the Bank may be used for attract- reporting period. The Bank has failed to present any ing deposits, as well as for making payments under proof of account statement having been forwarded loan relationship between the parties, and so on. to the Client’s e-mail, nor has the Bank refused the Therefore, the claim of the Bank that there is no fact, in a letter to the Mediator, that they had not legal relationship arising out of a deposit agreement sent the extracts of account statement. The Media- between the parties, and what there may exist is tor therefore attests to the fact that the extracts loan agreement only, does not truly reflect the facts, of account statement would have been forwarded, and the Mediator attests to the fact that deposit in a 30-day interval, subject to the Contract, to the relationship is in place between the parties. Client’s e-mail, which had not happened. In other words, the right of the depositor to receive an ac- The next issue is whether the Bank has violated the count statement has been violated, in which case Client’s rights in this situation, that is, if they were the Bank must pay a fine to the Client in the amount obliged to provide account statements and failed of AMD 300,000. to do so. Since the Client has filed 12 separate claims against Article 6 (1) of the Law says that except as otherwise the Bank for paying AMD 300,000 for each provided for in paragraph 2, the bank shall furnish monthly statement he was supposed to receive, the depositor, at least in a thirty-day frequency, with while this claim is for AMD 300,000 for only a sin- an account statement on each deposit account with gle account statement not provided, the Mediator the bank, with the following information, which is needs to address the issue in a sense whether, in clear and free of any confusing, ambiguous or mis- this case, the Client should have the right to get leading formulations: 1) any sums debited from the paid AMD 300,000 for each account statement account on a daily basis, 2) earned annual percen- not received, or whether the Client should receive tage yield, 3) amount of interest accrued, 4) any fees one single amount of AMD 300,000 in total after and penalties charged, 5) the number of days in the the fact that not all account statements had ar- reporting period. Paragraph 2 of the same article rived would have been confirmed. says that the bank is not required to provide an ac- count statement to the depositor if no sums have To clarify this, the intrinsic nature of why the sum as been debited or credited on that account during the specified in Article 12 (1) of the Law on Attraction of reporting period. Bank Deposits is to be charged and why the real will of the legislator is prescribed the way it is presented The passages of the law mentioned above imply needs to be analyzed. that the bank is nevertheless required to provide, in a thirty-day frequency, an account statement, which The examination of this claim found out that the should contain the information provided for by the Client’s right to receive an extract of account state- law, except when that account has not been debi- ment has been violated, yet it has been violated not ted or credited by the bank during the reporting pe- once, but twelve times, as the account statement had riod. According to the facts of this case, the Bank not been provided to the Client, subject to the terms has taken the reporting period for either account of and conditions set out in the Contract, throughout
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Precedents/Exemplary Cases twelve reporting periods (months) in a row. In this case, the Mediator finds that the Client’s claim cannot be satisfied by paying the sum of AMD 300,000 twelve times, since the fact of violation of the rights of the same depositor is acknowledged once by the Case 7 Mediator, that person will be entitled to receive a to- tal of AMD 300,000 only, regardless of the number of claims filed by the Client. To summarize, it should be noted that a failure to send an extract of bank Disagreement with the size of damage and account statement corroborates the fact of violation penalty applied for overdue payment of the rights of the Client as depositor, and the Bank must pay the sum of AMD 300,000 to the Client. Thus, in view of the statement mentioned above, There has been a traffic accident that caused da- and by virtue of Article 14 (1) of the Republic of Arme- mage to the Client’s own motor vehicle “Opel Vec- nia Law on Financial System Mediator, the Media- tra 1.8”. The traffic police officers have arrived at tor has made a decision to satisfy the Client’s claim the scene of accident and had it protocoled. An against the Bank. administrative proceeding followed based thereon but was abated at some point later. Having received the Expert’s opinion, the Client filed an application to the Company but did not receive any document in writing on the request within the timeframe established by law. Pursuing resolution of the problem, the Client has filed a complaint to the Company and received an answer saying that the Company has made a decision for insurance indemnity and has subsequently paid AMD 46,500 as insurance compensation, which the Client has disagreed with. The Client noted that he has been a downright suffered party of the accident, nor has he behaved in a manner that could have contra- vened the Road Traffic Rules.
In a letter to the Financial System Mediator, the Client demanded that the Company recompense the damage caused, which amounts to AMD 120,000, and cover the fines as provided for under the Terms for the days overdue.
In a letter to the Mediator, the Company noted that in connection with a traffic accident involving motor vehicles “Opel Vectra 1.8” and “VAZ 2107”, the Client has filed an application to the Company for insu- rance indemnity against the damages caused to the property. A damage assessment report has been
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Precedents/Exemplary Cases prepared on the basis of the application, which mea- in the occurrence of the accident, in which case the sured the damage to the “Opel Vectra 1.8” to reach compensation is deducted: a) to the extent of 100% of an estimated AMD 93,000. Based on the conclusion the damages to the property of the sufferer party, if by the “National Bureau of Expertise”, a non-com- they are the only culprit for the accident, and b) to the mercial organization of the Government of the Re- extent of 50%, if there is other people’s fault in the public of Armenia, the Company has made a deci- occurrence of the accident, as well. sion about insurance indemnity, according to which the owner of the “Opel Vectra 1.8” has subsequently In this case, the expert’s conclusion on the causes been paid AMD 46,500 as insurance compensation. of traffic accident, as issued by the N“ ational Bureau A complaint has been lodged against the Company of Expertise” upon the request by the Traffic Police thereafter, the response to which was provided by of the Republic of Armenia, has served a basis for the Company as an attachment to their letter. the Company to make a decision, without looking to provide investigation of the reasons, on paying to Thus, a comprehensive review of the claim-related the Client an insurance compensation to the extent documentation and deliverables as well as reference of 50% of the damage caused. to the legislation requirements led the Mediator to conclude as follows: By reference to the matter of making a decision on insurance indemnity without looking to provide There has been a collision of two motor vehicles – investigation of the reasons, the Mediator found it “Opel Vectra 1.8” and “VAZ 2107” – in the case of necessary to emphasize the following: which the general principles of liability for the causing of harm as established in Article 1058 of the Republic For this case, the Standard Compensation Procedure of Armenia Civil Code shall be the source to refer to. 2 will be applicable, as the case does not meet all the conditions of the Simplified Compensation Procedure Once the accident has occurred under the Man- and an administrative proceeding has been carried out datory Third Party Motor Liability Insurance Policy, in respect of the insurance event. Moreover, taking into the Company must indemnify the sufferer against account that the authority, which ran the administra- the damage caused to them and/or to the property tive proceedings did not address the issue of guilt, the owned by them. In addition, the compensation pro- degree of guilt of the person in the car accident should vided by the Company must be sufficient to recover have been determined by the relevant expert, pursuant the damaged property to the condition it has been to Annex 7. into before the occurrence of the accident. So, according to the aforementioned legal arrange- According to subparagraph 94 of the operatio- ments, the Company would have to provide investiga- nal rules RL 1-001 of the Bureau of Car Insurers of tion of the reasons and make a decision based on the Armenia, as approved by the Board of the Bureau results of such investigation. (hereinafter also referred to as “the Rules”), as they are rendered effective at the time of filing an ap- Based on the statement above and taking into con- plication, the insurer having received the application sideration that the Client has voiced, in a letter to (“the Insurer”) shall turn down the insurance indem- the Mediator, disagreement with the issue of being nity or, in the cases provided for by this chapter, re- found guilty, the Mediator has engaged the expertise duce the amount of insurance compensation, if: … for investigation of the reasons; so according to the 5) there is non-intentional fault of the sufferer or of expert conclusion issued by the “Center of Expertise”, the person who owns the motor vehicle of the sufferer the driver of the “Opel Vectra 1.8” and the driver of
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Precedents/Exemplary Cases the “VAZ 2107” were both found guilty of the acci- which means that the Company had 16 days belated dent. This infers that the accident involves both the with regard to the assigning of examination of the non-intentional fault of the sufferer, i.e. the Client, causes before notifying the Client of the Compensa- and the fault of another person involved in the ac- tion Package. The Company has made a decision to cident, in which the compensation shall be reduced pay insurance compensation and notified the Client to the extent of 50% of the damage caused to the of the Compensation Package by sending it via the Client’s property. email as referred to in the application for compensa- tion, which they should have provided after the re- Bearing in mind the above-said and by reference to ceipt of the notification of the results of causes and the requirement set forth in paragraph 94 (5) of the damage examination, under which circumstance no Terms, the Mediator admits that the Company has date of the notice for payment of Insurance Com- an obligation to pay insurance compensation to the pensation Package has fallen overdue. extent of 50% of the damage caused to the Client. In this case, the number of belated days for all acti- The Client has also disagreed with the results of the vities is 7 and more. In particular, we have 16 days be- Company’s assessment of the damage, according to lated with regard to the assigning of examination of which the damage caused to the “Opel Vectra 1.8” the causes for accident, under which circumstance was an estimated AMD 93,000. Therefore, the Me- the amount of penalty accrued for 16 belated days diator has delegated the assessment of damage to reaches AMD 28,800 (16 x 1,800 = 28,800) but the the expertise. According to the expertise conclusion, amount of penalty payable by the Company in ac- the damage caused to the “Opel Vectra 1.8” could cordance with paragraph 102 of the Terms cannot amount to AMD 110,000. be less than AMD 50,000. Based on the foregoing, the Mediator considers it important to emphasize Taking into consideration the above mentioned, that the total amount payable by the Company to the Mediator believes that the Client’s claim for in- the Client is AMD 58,500, of which AMD 50,000 is surance indemnity is subject to satisfaction to the imposed as a penalty and AMD 8,500 as an extra extent of 50% of the damage caused to the “Opel insurance indemnity against the damage caused to Vectra 1.8”, which makes up AMD 55,000 plus AMD the motor vehicle. 8,500 as the difference of AMD 46,500, which had been already paid. Taking into account the above-mentioned, and by virtue of Article 14 (1) of the Republic of Armenia Law As to the Client’s request for penalties, the Mediator on the Financial System Mediator, the Mediator has found it necessary to emphasize the following: decided to partially satisfy the Client’s demand, in the amount of AMD 58,500. The Client has filed to the Company an application for insurance indemnity against the damage caused to the motor vehicle “Opel Vectra 1.8”, owned by the Client, as a result of traffic accident. The Com- pany has assigned examination of the damage and the expert carried out the damage assessment. The Company, however, has failed to assign examination of the causes for accident, yet in the case of a Stan- dard Compensation Procedure 2, they would have to do so within 1 day after receipt of the application,
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Precedents/Exemplary Cases licy, the diseases of the endocrine system a person has at the time of purchasing an insurance policy shall not be considered as insurance events nor shall be subject to indemnity under the Health Insurance Case 8 Program. The Company added that the Client has been reimbursed for previous consultations and for laboratory and instrumental research as they had not had an endocrine system disease diagnosed at Turning down the insurance indemnity under the time of signing the Contract. Yet, upon signing health insurance a new contract and purchasing an insurance poli- cy, the Client had already had an endocrine-system disease, namely “Nodular Goiter”, the costs for con- There has been a health insurance contract signed sultation, research and treatment of which are not between the Bank and the Company, whereby the subject to indemnity. Client was an Insured person. A number of medical examinations have been carried out at “Nairi” Medi- Which is why, the Company noted, the complaints cal Center, with a subsequent one to be carried out submitted by the Client were turned down. four months later. A thorough review of the documentation related to A new contract, the Client said, was signed with the claim, of the arguments presented by the par- the Company. Experiencing sharp stitches on the ties, and of legislative requirements resulted in con- neck, the Client contacted the Company with a re- siderations, as follows: quest to carry out the medical examination a lit- tle bit earlier but was denied verbally. The exa- According to subparagraph 3.2 of Annex 4 “Terms mination has been carried out at “Izmirlian” Med- of Voluntary Medical Insurance Coverage” to the ical Center and the Armenian-American Health Voluntary Health Insurance Policy, signed between Center for which the Client has paid AMD 10,000 the Company and the Bank, an insurance event in- and AMD 7,500, respectively. The Client has filed volves the applying of the Insured to the medical a complaint to “Garant Assistance”, the Company’s institution, which has been actually established, agent, but received a refusal. The Client does not and/or to another such institution, as provided for agree with such position as the medical examina- under the Contract/Policy or agreed with the Insu- tion is what the specialist has assigned, which is rer, subject to the terms and conditions and during subject to compensation. the period of the Contract/Policy for medical assis- tance in connection with deterioration of health, In a letter submitted to the Mediator, the Client de- injury, poisoning, healthcare and other situations manded that the Company provide insurance com- requiring medical care. pensation in the amount of AMD 17,500. According to subparagraph 10.4 of Annex 2 “Health In a letter to the Mediator, the Company wrote Insurance Program” to the Voluntary Health Insu- that a Voluntary Health Insurance Policy was signed rance Policy, the diseases of the endocrine system between the Company and the Client under the a person has at the time of purchasing an insurance General Health Insurance Program. The Company policy shall not be considered as insurance events noted that according to paragraph 10.4 of section nor shall be subject to indemnity under the Health “Exceptions to Insurance Compensation” of the Po- Insurance Program. Because upon signing a new
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Precedents/Exemplary Cases contract for purchasing an insurance policy the In this event, taking into account the fact that no Client had already had an endocrine-system disease, other stipulation is expressly made in the Contract/ it is obvious that the expenditures by the Client Policy, the costs incurred after the term of the in- cannot be indemnified under the Contract involved. surance contract are not subject to reimbursement, irrespective of the fact that the insurance event has As to the reimbursement of costs incurred within occurred during the term of the insurance contract. the Voluntary Medical Insurance Policy signed between the Company and the Bank, it should be Thus, taking into account the statement mentioned emphasized that specific outpatient ambulatory above, adhering to the procedural requirements counseling in urgent and planned cases shall be as defined in Article 11 of the Republic of Armenia deemed an insurance event and shall be subject Law on the Financial System Mediator, the above to insurance indemnity within the framework of provisions of the Civil Code of the Republic of Ar- the Program (subparagraph 1.2 of Annex 2 “Terms menia, the provisions of the insurance contract as of Voluntary Medical Insurance Coverage” to the has been referred to above, as well as by virtue of Policy). According to paragraph 2 of the Policy, Article 14 (1) of the same law, the Financial System doctor-instructed laboratory and instrumental Mediator has decided to reject the Client’s claim diagnostics, subject to the terms of the Policy, for against the Company. the purpose of controlled diagnosis and treatment of the patient in acute, urgent and planned cases is subject to insurance indemnity.
Basing on what has been stated above, the Com- pany has reimbursed medical examination and treatment costs during the period of validity of the Contract. As to the Client claiming that the costs for examination performed after the expiration of the term of the Contract must also be reimbursed, the following should be considered: according to subparagraph 9.12 of Annex 4 “Terms of Voluntary Medical Insurance Coverage” to the Policy, the In- surer shall not reimburse the costs, which the Poli- cyholder (the Insured) has incurred after expiration of the period of validity of the Contract/Policy, or incurred in connection with occasions containing elements of an insurance event that has occurred prior to the entry of the Contract/Policy into force. The Insurer shall reimburse the costs incurred af- ter the termination of the Contract/Policy related to the accidents taken place in the duration of the Contract/Policy, provided that such costs have been incurred before the moment when the In- sured experienced a life-threatening situation has phased out, unless otherwise stipulated by the In- surance Contract/Policy.
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Precedents/Exemplary Cases With regard to the claim, the Company noted that there has been an accident in which three mo- tor vehicles, “Opel Vectra”, “Mercedes-Benz” and “Hyundai Tucson”, (the latter with an unknown Case 9 number plate) bumped into each other. The ac- cident has inflicted property damage to the mo- tor vehicles involved. The Client has filed an ap- plication to the Company for insurance indemnity Insurance indemnity turned down against the damage. Subsequently, a damage as- sessment report prepared on the basis of the appli- cation measured the damage to the “Opel Vectra” There has been a traffic accident involving three to reach an estimated AMD 180,000. The Company motor vehicles, and damage has been caused to has turned to the “Center of Expertise”, a non-com- the Client’s own “Opel Vectra” as a result. The mercial entity, for the examination of the accident. Client has applied to the Company for insurance According to the expert conclusion, the “Hyundai” indemnity. The Company has arranged an auto- with an unknown number plate is responsible for technical expertise that measured the damage the accident. According to paragraph 84, chapter to the car to reach an estimated AMD 180,000. 16, of Compulsory Motor Vehicle Third Party Liabil- After the cause of accident was examined, the ity Insurance Contract and Terms and Conditions driver of Hyundai Tucson was found responsible for (Rules RL-001) of the Armenian Bureau of Motor the accident, while the Client and the other par- Insurers, ULE, in this situation the Company acts ticipant of the accident, the driver of “Mercedes- as Insurer, which has received the application for Benz”, were recognized faultless. The Company insurance indemnity while the Armenian Bureau of has made a decision to reject insurance indemni- Motor Insurers acts as Insurer, which undertakes ty, reasoning that the owner of the motor vehi- the payment of insurance indemnity. This implies cle found guilty is unknown. The Client has voiced that the Company performs the insurance busi- disagreement with the results of the cause exami- ness on behalf of the Armenian Bureau of Motor nation and the decision of the Company to turn Insurers. By virtue of Article 49 (1) 1 of the Republic down insurance indemnity because: a) the driver of Armenia Law on Compulsory Insurance Against of “Mercedes-Benz” is partly responsible for the Civil Liability in Respect of the Use of Motor Vehi- accident, and b) the number plate of the “Hyundai cles, as well as that the driver of the “Hyundai Tuc- Tucson” is known, too, since it is clearly seen in the son” with an unknown number plate is considered video of the accident. Thus, as the “Hyundai Tuc- to be guilty of the abovementioned accident and son” number plate is known, its owner can also be that there has only been an application filed to the identified, so turning down the insurance indem- Company for indemnity against property damages, nity by the Company by referring to the unknown the Company has decided to reject. A complaint owner of the motor vehicle that has caused the has been filed to the Company, the response to damage is groundless. which has been made available to the Mediator.
In a letter to the Financial System Mediator, the Thus, a comprehensive review of the claim-related Client demanded that the Company pay the full documentation and deliverables as well as reference amount of insurance indemnity against the damage to the legislation requirements led the Mediator to caused, which amounts to AMD 180,000. conclude as follows:
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Precedents/Exemplary Cases Once the expertise reveals that damage has been or the person responsible for signing the MTPLI con- caused by the use of the motor vehicle, which tract for it rendered unknown has not been proved. a motor third party liability insurance contract has Moreover, further investigation of the case revealed not been signed for, the Bureau will indemnify at that the number plates of the “Hyundai Tucson” the expense of the Guaranty Fund. But if the motor were found in the balance of the Police of the Na- vehicle that has caused the damage or the person gorno-Karabakh Republic. Thus, during the examina- who has an obligation to sign a respective MTPLI tion of the claim evidence was obtained that the regis- contract is unknown, the Bureau shall only indem- tration number is real and registered on the balance of nify against personal damages of the injured, at the the Police of the Nagorno-Karabakh Republic, and who expense of the Guarantee Fund. This statement in- exactly drove the motor vehicle with those number fers that the Bureau does not indemnify against the plates on that day (the number plates were of an property damage of the injured, if the motor vehicle on-duty registration) can be found out by sending that has caused the damage or the person who has an inquiry to the Police of the nagorno-Karabakh an obligation to sign the MTPLI contract is proven to Republic and identifying the person having caused be unknown. the damage.
According to paragraph 84, chapter 16, of Rules Thus, taking into account the above-mentioned, RL-001 of the Armenian Bureau of Motor Insurers, and by virtue of Article 14 (1) of the Republic of Ar- ULE, if the Company, which has received the appli- menia Law on the Financial System Mediator, the cation for insurance indemnity finds that no MTPLI Mediator has decided to satisfy the Client’s claim contract has been signed in respect of the motor against the Company. vehicle that has caused the damage, they must in- demnify, acting on behalf of the Bureau.
In this case, the Company, acting on behalf of the Bureau, has refused to pay compensation referring to the circumstances that the motor vehicle that caused the damage was unknown and the damage caused to the victim was property-related. It should be noted that Article 49 (1) 1 of the Law establish- es that the Bureau shall not indemnify against da- mage to the property when the motor vehicle that has caused the damage or the person who has an obligation to sign a respective MTPLI contract is un- known. In this particular case, the Bureau as well as the Company acting on behalf of the Bureau shall have to prove that the motor vehicle or the person who has an obligation to sign the MTPLI contract is unknown BEFORE turning down the request for insurance indemnity with the abovementioned reason. The Company did not spend all reasonable efforts to detect the motor vehicle that has caused the damage or the person responsible for signing an MTPLI contract for it. Therefore, the motor vehicle
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Precedents/Exemplary Cases documentation such as the copy of the insurance Policy signed with the Company, the copy of the application for insurance indemnity, the treatment/ medication documents, the Client’s letter of com- Case 10 plaint and the copy of response letter thereof, and the copy of the decision about turning down the insurance indemnity. Taking into account the Com- pany’s arguments in the documents attached to Turning down the insurance indemnity under the response letter, the Office of Mediator has re- health insurance quested the Company to provide evidence that all diseases diagnosed with the Client are included in the list of government-guaranteed order, a proof of As described in the claim submitted, the Client is an established amount of co-payment, as well as to an Insured person under the voluntary health in- provide all correspondence (inquiries and response surance contract. Because of deteriorated health to such inquiries) between the Company and the condition, the Client was taken to “Erebuni” Med- “Erebuni” Medical Center in connection with the ical Center where he had been examined and re- Client diagnosis and treatment. ceived an in-patient conservative treatment. While the Company has reimbursed medical examination In response to the above-said e-mail, the Com- costs, the money spent on an in-patient treatment pany explained that what they have tried to say and all required medicines has not been reimbursed was not that all diagnosed diseases had been in- on the ground that the Client is recognized as a 3rd cluded in the list of government-guaranteed order, degree disabled person. The Company has noted but rather they meant that being disabled serves that if the medical center does not provide free a basis for providing medical services under the go- in-patient treatment under the government-guaran- vernment-guaranteed order, as established in Article teed orders, the Company will do it; but the matter 11 of the Republic of Armenia Law on Social Protec- is that it is not reimbursable for now. tion of Persons with Disabilities. (In the Republic of Armenia, persons with disabilities benefit from an The Client has paid AMD 215,000 to cover the treat- access to quality, free of charge medical assistance ment costs, subject to reimbursement by the Com- at the state’s medical institutions at the expense of pany. The Client has filed a complaint to the Com- state budget.) The Company noted that, according pany but has been turned down. to the description in Annex 3 (paragraph 8, subpa- ragraph 8.23) to the Contract signed between the The Client has requested from the Company an in- Company and the Client, “…The diagnosis and treat- surance compensation of AMD 215,000 to cover the ment of diseases and problem conditions included in in-patient treatment costs the Client has incurred. the list of government-guaranteed order shall be in- demnified by way of co-payment”. If a person with In a letter to the Mediator, the Company wrote that disability needs an in-patient treatment, it is no- the Client’s authorized person has filed a request for thing more than a situation acceptable in the insurance indemnity to the Company. In response, framework of government-guaranteed order. And the Company made a decision to turn down the the reading ‘indemnification by way of co-payment’ request for insurance indemnity, reasoning that does not refer to the case with the Client, but re- what was talked about in the letter had nothing fers to specific diagnoses where the framework to do with insurance event. The Company provided of government-guaranteed order finances part of
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Precedents/Exemplary Cases the expenditure and the rest is funded by way of category disabled, regardless of acute or chronic con- co-payment. Based on the foregoing, submitting of dition he was in, their treatment should have been or- a relevant proof of the amount of co-payment has ganized and carried out under the government-guaran- nothing to do with the Client’s case. teed order, as established by the above-mentioned Government decree. This means that the treatment Thus, a comprehensive review of the claim-related the Client received falls under the government-guaran- documentation as well as reference to the legis- teed order, and indemnifying by the Company of the lation requirements led the Mediator to conclude costs incurred by the Client must be rejected, in ac- as follows: cordance with subparagraph 8.23 of Annex 3 of the Contract. Taking into consideration the medical arguments contained in the decision taken by the Company, Thus, taking into account the statement mentioned the Mediator has decided to involve a specialist in above, adhering to the procedural requirements as investigation of the claim, who has noted that the defined in Article 11 of the Republic of Armenia Law Client’s treatment was not to curing a chronic disease on the Financial System Mediator, the above provi- or age-related changes but to bringing the Client sions of the Civil Code of the Republic of Armenia, out of poor health condition caused by dehydra- the provisions of the insurance contract referred to tion as a result of diarrhea and vomiting. Moreover, above, the Government decree no. 1515-N of de- according to the specialist, the situation with the cember 26, 2013 on Government-Guaranteed Free Client might also be considered as being in need for and Privileged Medical Assistance and Service, as urgent medical treatment. In essence, the Compa- well as by virtue of Article 14 (1) of the same law, ny did not have objection to this argument, except the Financial System Mediator has decided to turn just mentioning that the problem was not the di- down the Client’s claim against the Company. agnosis, but the disability status under the govern- ment-guaranteed order, so the Client should have been registered and waited for a scheduled treat- ment, which points to the Client’s health condition not being acute at the time, as had been referenced in the relevant document, and if the situation was really critical (as indicated by the expert involved in the case review), the medical center engaged ought to arrange an immediate medical care, under the government-guaranteed order.
Thus, in view of the above, the Office of Mediator had to clarify: a) whether or not the disease/con- dition diagnosed with the Client is included in the government-guaranteed order, and b) if so, what is the amount of statutory co-payment per person?
The above regulatory arrangements infer that the medical services to the Client are not considered to have been provided using state-of-the-art and expen- sive technologies, and given that the Client is a 3rd
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Precedents/Exemplary Cases to the Mediator, the Client urges the Organization to refund AMD 67,500, as well as to pay AMD 300,000 as a sum of fine, which is stipulated under the Law on Consumer Crediting. Case 11 In a letter to the Mediator, the Organization wrote that the Client who has signed a Consumer Loan Agreement with the Organization had regular- Disagreement with the size of loan service fees ly made early repayments under that agreement, which deviated from the loan repayments schedule. The Organization, citing paragraph 1.8 of the loan The loan agreement signed between the Client agreement, pointed to the Client having assumed and Credit Organization (hereinafter referred to as an obligation to pay a fixed monthly sum at the the “Organization”) involved an amount of AMD rate of 1.1% of the loan amount, which will not be 1,500,000, at the annual interest rate of 24% and ac- going to decrease as a result of reduced balance of tual rate of 66.9665%. The Client has made early re- the loan. Furthermore, the Organization wrote, the payments, and by the time of making the complaint, fee is normally payable for loan servicing (mainte- nearly AMD 1,140,000 of the loan principal plus rele- nance), which is provided by the Organization, so it vant interest had been repaid. The problem arose in should be paid by the Client prior to full repayment connection with monthly maintenance fees. Accord- of his obligations under the Agreement. Referring to ing to paragraph 1.8 of the Agreement, the Client the Client’s claim for paying AMD 300,000 as com- shall pay the Organization a monthly fee of 1.1% of pensation, the Organization believes they have not the loan amount, which is AMD 16,500 per month. committed any violation breach and making a claim All the payments, the Client said, were made ahead by the Client to get compensation is groundless. of the loan repayments schedule, and the amount of loan has reduced as a result. Yet, the Organization Thus, a comprehensive review of the claim-related has not taken this circumstance into account all that documentation, as well as reference to the legisla- time, and the same maintenance fees in the amount tion requirements led the Mediator to conclude as of AMD 16,500 continued to be charged monthly. follows: The Client, citing Article 10 (2) of the Republic of Armenia Law on Consumer Crediting, argued that A thorough review of the regulatory arrangements early fulfillment (repayment) by the customer of his/ infers that in case of early fulfillment of the obliga- her obligations under credit agreement would result tion, the total consumer credit costs shall reduce in the total cost of credit reduced proportionally. The proportionally. Total credit costs consist of all interest Organization has failed to proportionally reduce the and other charges, which the consumer has to make monthly maintenance fees, which, the Client thinks, (incur) for credit, and paragraph 4 of Regulation 8/01, was violation of the abovementioned law. The Or- which specifies the list of other charges included in ganization has charged the Client extra mainte- total costs, has counted the loan maintenance fee nance fees of AMD 67,500. The Client believes that, in these charges. That is, the Mediator states that under Article 20 of the Law on Consumer Credit- in case the obligations under the credit agreement ing, the Organization should also pay him a sepa- are fulfilled ahead of an established timeframe, total rate AMD 300,000 for the above infringement. The credit costs should be reduced proportionally; loan Client has filed a complaint to the Organization but maintenance/servicing fee that makes part of to- received no reply therefrom. In his letter of request tal costs of consumer credit should also be reduced
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Precedents/Exemplary Cases proportionally. Moreover, if there is an early repay- the borrower under the law. In other words, the ment of the liability (obligation) under the credit Mediator believes that a monthly loan maintenance agreement, the total credit cost should be reduced fee reduced proportionally suggests figuring out proportionally. It is necessary to underline that this what share the early loan repayment holds in the regulatory arrangement is an imperative norm and principal (original) amount of the loan and reducing the parties have no right to think over another ar- the monthly maintenance fee in proportion to the rangement by mutual consent. As to the Organi- amount of early repayment, starting from the mo- zation objecting that the monthly maintenance fee ment of the early repayment, for the forthcoming pe- shall only be deducted when full, rather than par- riod. Moreover, proportional reduction of total credit tial, repayment of the loan ahead of the repayment costs shall occur from the moment of making early schedule has been done, the Mediator finds that ear- repayment until such time as the credit shall have ly repayment constitutes both the full repayment of deemed early repaid to that extent, and if on the day the liability and the early repayment of part thereof. of regular loan installment the borrower fails to re- Otherwise, this assurance pledged under the Republic pay any money or pays less than agreed upon origi- of Armenia Law on Consumer Crediting would have nally when signing the loan agreement, the amount proved ostensible and not entirely applicable. There- of early repayment will be treated as the amount of fore, in case of partial and full early repayment, the regular loan installment mentioned above, and from total consumer crediting costs need to be reduced. that moment the loan will not be considered as pre- maturely repaid, while the monthly maintenance fee Looking to an answer to the following question is will again increase proportionally. essential for the Mediator in examining and resolving this claim: If early repayment (fulfillment) of liability The Mediator states that the loan obligation under under consumer credit is concerned, how the monthly the contract has been fulfilled ahead of the schedule loan maintenance fees that come as a component of yet the loan maintenance fee has not reduced pro- total credit costs be reduced proportionally? portionally. The Organization has thereby violated the consumer right provided for in Article 10 (2) of The law does not provide a formula for proportio- the Republic of Armenia Law on Consumer Credi- nal reduction, but the Mediator finds that the notion ting. Had the maintenance fee reduced proportio- ‘proportionally’ does imply that the maintenance fee nally by the logic described above, the total service should be deducted in proportion to the reduced fee paid by the Client for the period specified would amount of the loan if it has been repaid by the have been AMD 16,387.15 less than actually paid. borrower ahead of the schedule. That is, from the moment the borrower has repaid the loan amount Summarizing the above, the Mediator believes that ahead of the schedule, the logic that the principal of the Client’s claim should be satisfied in the amount the loan has been that much less should work. What of AMD 316,387.15, of which AMD 300,000 as the is more, this logic must only apply to the forthcoming sum of fine for violation of consumer rights and period of the loan commitment, from the moment AMD 16,387.15 as the sum deductible from the total of making early repayment of the loan up until the consumer credit costs incurred by the Client. termination date under the loan agreement, since up to that point the borrower has had another amount Thus, taking into account the above-mentioned, and taken from the bank or credit organization, and from by virtue of Article 14 (1) of the Republic of Armenia that moment on, has made some early repayments, Law on the Financial System Mediator, the Media- in which case the total credit costs as well as the tor has decided to partially satisfy the Client’s claim actual annual loan interest rate come changed for against the Organization.
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Precedents/Exemplary Cases ACKNOWLEDGEMENTS A “thank-you” note A “thank-you” note To Emilia Harutyunyan I am very thankful to the staff of the FSM for their Claim Accepting Specialist work, which helps protect customers’ rights and make them feel better in their country. May God Thank you and your organization for your prompt give you the strength, health, happiness and success response and consistency. To be honest, when in your kind endeavors! I wrote a letter to the FSM, I did not even hope that you would reply. Sincerely, A.A. Thank you! January 17, 2017 Sincerely, H.G. March 23, 2017
A “thank-you” note
My opinion of you is only positive. Very content and A “thank-you” note have no complaints. An excellent team, a competent, knowledgeable, Sincerely, S.M. willing and unselfish staff, which always demon- January 20, 2017 strates a highly caring attitude.
Sincerely, G.B. April 4, 2017
A “thank-you” note
I thank all the staff of the Office of Financial System Mediator. I very much appreciate what you do. A “thank-you” note To Khoren Nazaryan, Mane Babajanyan Sincerely, A.A. and Rafik Grigoryan, March 20, 2017 Claim Accepting and Investigating Specialists
My thanks to all the staff of the Office of Finan- cial Mediator, especially to Khoren Nazaryan, Mane Babajanyan and Rafik Grigoryan, who elaborated a positive outcome to my complaint, demonstrating a responsible behavior in their work.
Sincerely, S.Sh. May 5, 2017
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Acknowledgements A “thank-you” note A “thank-you” letter To Mane Babajanyan Re: the “Good Camp” program Claim Accepting Specialist Dear staff of the Office of the Financial System Me- I would like to express my gratitude to Mane Ba- diator, we are content and grateful for the warm bajanyan for providing professional advice and, most welcome, for opening up the secrets of the financial importantly, for the right attitude and humane sector to us and making our day an unforgettable warmth, which is very important for every applicant. experience with full of impressions. The kind initia- tive you took has inspired us and led us to choosing Sincerely, N.G. the right lifestyle skills. It is good to note that some June 7, 2017 participants have decided on the path to professio- nal growth. This was a wonderful opportunity for us to discover what is new, essential and interesting. We are also thankful for the surprise gifts, which was a great help to the community’s schoolchildren A “thank-you” note on the brink of the school-year. To Lilit Simonyan Claim Investigating Specialist With love and respect, “Azhdahak” Eco Club: I cordially express my gratitude to your company, August 21, 2017 in particular, Lilit Simonyan, for a full-scale perfor- mance of her duties.
Sincerely, R.G. July 6, 2017 A “thank-you” note Re: the “Good Camp” program
The knowledge we received in the framework of the workshop will certainly help us and the schoolchild- A “thank-you” note ren in the future. We appreciate it.
Ideal work quality with dedicated staff. Sincerely, A.Kh. August 21, 2017 Sincerely, R.O. July 26, 2017
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Acknowledgements A “thank-you” note A “thank-you” note Re: the “Good Camp” program To Laura Poghosyan and Movses Khachatryan Claim Accepting and Investigating Specialists You have initiated a very good job, thank you! I would like to thank the Office of Financial System Sincerely, L.M. Mediator, particularly Laura Poghosyan and Movses August 21, 2017 Khachatryan for their excellent job, which was done in an excellent and professional manner.
Sincerely, T.G. November 29, 2017 A “thank-you” note To Lilit Gabrielyan Claim Investigating Specialist
My thanks to your professional staff, especially Lilit A “thank-you” note Gabrielyan! To Mane Babajanyan Claim Accepting Specialist Sincerely, V.H. August 22, 2017 I am thankful to Mane Babajanyan for delivering a caring attitude and good disposition. My thanks to all the members of the Complaints Handling Team!
Sincerely, Tadevosyan A “thank-you” note To Rafik Grigoryan Claim Investigating Specialist
I would like to express deep gratitude to the Office of Financial System Mediator for the accurate and proper work. In particular, I would like to thank Rafik Grigoryan for his fair work. Thank you very much!
Sincerely, S. M.
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Acknowledgements The list of organizations which did not sign the covenant Banks: 12. “Byblos Bank Armenia” CJSC 1. “Armeconombank” OJSC (If the size of property claim exceeds AMD 250,000 or its (If the size of property claim exceeds AMD 250,000 or its foreign currency equivalent, and the amount of transaction foreign currency equivalent, and the amount of transaction exceeds AMD 500,000 or its foreign currency equivalent). exceeds AMD 500,000 or its foreign currency equivalent). 13. “Artsakhbank” CJSC 2. “Araratbank” OJSC (If the size of property claim exceeds AMD 250,000 or its (If the size of property claim exceeds AMD 300,000 or foreign currency equivalent, and the amount of transaction its foreign currency equivalent). exceeds AMD 500,000 or its foreign currency equivalent). 3. “Anelik Bank” CJSC 14. “VTB-Armenia Bank” CJSC (If the size of property claim exceeds AMD 500,000 or (If the size of property claim exceeds AMD 250,000 or its its foreign currency equivalent). foreign currency equivalent, and the amount of transaction 4. “Evocabank” CJSC exceeds AMD 500,000 or its foreign currency equivalent). (If the size of property claim exceeds AMD 250,000 or its 15. “Unibank” OJSC foreign currency equivalent, and the amount of transaction (If the size of property claim exceeds AMD 250,000 or its exceeds AMD 500,000 or its foreign currency equivalent). foreign currency equivalent, and the amount of transaction 5. “Armbusinessbank” CJSC exceeds AMD 500,000 or its foreign currency equivalent). (If the size of property claim exceeds AMD 250,000 or its 16. “Ardshinbank” CJSC foreign currency equivalent, and the amount of transaction (If the size of property claim exceeds AMD 250,000 or its exceeds AMD 500,000 or its foreign currency equivalent). foreign currency equivalent, and the amount of transaction 6. “Ameriabank” CJSC exceeds AMD 500,000 or its foreign currency equivalent). (If the size of property claim exceeds AMD 250,000 or its 17. “Armswissbank” CJSC foreign currency equivalent, and the amount of transaction (If the size of property claim exceeds AMD 250,000 or its exceeds AMD 500,000 or its foreign currency equivalent). foreign currency equivalent, and the amount of transaction 7. “Converse Bank” CJSC exceeds AMD 500,000 or its foreign currency equivalent). (If the size of property claim exceeds AMD 250,000 or its foreign currency equivalent, and the amount of transaction Credit organizations exceeds AMD 500,000 or its foreign currency equivalent). 1. “AGROLEASING Leasing Credit Organization” LLC 8. “Mellat Bank” CJSC 2. “ANIV” UCO LLC (If the size of property claim exceeds AMD 250,000 or its 3. “First Factoring Company” UCO CJSC foreign currency equivalent, and the amount of transaction 4. “AREGAK” UCO LLC exceeds AMD 500,000 or its foreign currency equivalent). 5. “Arfin” Credit Union LLC 9. “HSBC Bank Armenia” CJSC 6. “BLESS” UCO LLC (If the size of property claim exceeds AMD 250,000 or its 7. “Housing for Youth” RCO CJSC foreign currency equivalent, and the amount of transaction 8. “GARNI INVEST” UCO CJSC exceeds AMD 500,000 or its foreign currency equivalent). 9. “GOODCREDIT” UCO CJSC 10. “Inecobank” CJSC 10. “Express Credit” UCO LLC (If the size of property claim exceeds AMD 250,000 or its 11. “ECLOFF” UCO LLC foreign currency equivalent, and the amount of transaction 12. “KAMOURJ” UCO CJSC exceeds AMD 500,000 or its foreign currency equivalent). 13. “Credit Corp” ULO CJSC 11. “ACBA-CREDIT AGRICOLE BANK” CJSC 14. “Credo Finance” UCO CJSC (If the size of property claim exceeds AMD 250,000 or its 15. “Unileasing” UCO CJSC foreign currency equivalent, and the amount of transaction 16. “Nor Horizon” UCO LLC exceeds AMD 500,000 or its foreign currency equivalent). 17. “G & A” UCO LLC 18. “Varks AM” UCO CJSC
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List of Organizations Which did not Sign the Covenant 19. “SEF International” UCO LLC 6. “SIL INSURANCE” CJSC 20. “Parvana Credit” UCO LLC (Except for claims related to insurance contracts concluded 21. “CARD AgroCredit” UCO CJSC within the social package). 22. “Fides Mortgage Company” UCO CJSC 7. “ISG” LLC 23. “FINCA” UCO CJSC 24. “Export Finance” UCO CJSC Insurance brokers 25. “ACBA Leasing” CO CJSC 1. “RESOLUTION INSURANCE BROKER” LLC (If the size of property claim exceeds AMD 250,000 or its foreign currency equivalent, and the amount of transaction Pawnshops exceeds AMD 500,000 or its foreign currency equivalent). 1. “Adamand” LLC 26. “My Credit” UCO LLC 2. “Alexworld” LLC 27. “MOGO” UCO LLC 3. “Aghdagh” LLC 28. “Premium Credit” UCO CJSC 4. “Amalik Credit” LLC (If the size of property claim exceeds AMD 100,000 or its 5. “Amuni Group” LLC foreign currency equivalent, and the amount of transaction 6. “Amuni Credit” LLC exceeds AMD 300,000 or its foreign currency equivalent). 7. “AMS” LLC 29. “Development and Investments Corporation of 8. “Ashot Frangulyan” Private Entrepreneur Armenia” UCO CJSC 9. “First Pawnshop” LLC (If the size of property claim exceeds AMD 250,000 or its 10. “AS MASTER” LLC foreign currency equivalent, and the amount of transaction 11. “AUTO CREDIT” LLC exceeds AMD 500,000 or its foreign currency equivalent). 12. “Arag Finance” LLC 30. “First Mortgage Company” UCO LLC 13. “Arangel Provider” LLC (If the size of property claim exceeds AMD 250,000 or its 14. “Arbon” LLC foreign currency equivalent, and the amount of transaction 15. “Ar-Et” LLC exceeds AMD 500,000 or its foreign currency equivalent). 16. “Artzate Gavat” LLC 31. “Fast Credit Capital” UCO LTD 17. “Arman and Gnel” LLC (If the amount of transaction exceeds AMD 100,000). 18. “ARS ELITE” LLC 19. “Art Credit” LLC Insurance companies | Komitas ave. bld. 23, 4/1, Yerevan, Armenia | 1. “ARMENIA INSURANCE” LLC 20. “ART CREDIT” LLC (Except for claims related to insurance contracts concluded | P. Sevak str. 51/1, Kanaker-Zeytun, Yerevan, Armenia | within the social package). 21. “Artyom Ghahramanyan” Private Entrepreneur 2. “Armenia Export Insurance Agency” CJSC 22. “Best Credit” LLC 3. “NAIRI INSURANCE” LLC 23. “Garrant Credit” LLC (Except for claims related to insurance contracts concluded 24. “Gev–Star” LLC within the social package). 25. “Gevasar Credit” LLC 4. “RESO” CJSC 26. “Gevorgyan and Company” LLC (Except for claims related to insurance contracts concluded 27. “Gold Idea” LLC within the social package). 28. “Gold & G.B” LLC 5. “ROSGOSSTRAKH - ARMENIA” CJSC 29. “Gold & Money” LLC (Except for claims related to insurance contracts concluded 30. “Gold Credit” LLC within the social package). 31. “Gold Street” LLC 32. “Gold Cash” LLC 33. “Gold Consulting” LLC
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List of Organizations Which did not Sign the Covenant 34. “Goodavi” LLC 73. “Musoyan-AAA” LLC 35. “Gr-Av-Mo” LLC 74. “Yana-Gor” LLC | Arshakuniats, 35, office area No. 53, Yerevan, Armenia | 75. “Umoneyline” LLC 36. “Gravatun777” LLC 76. “Ninella” LLC 37. “DIAMOND CREDIT” LLC 77. “Nomidisc” LLC | Gorki str. bld. 68, office area No. 3, Gyumri, Armenia | | Hanrapetutyan str. bld. 11, No. 1/1, Abovyan, Armenia | 38. “Diamond Credit” LLC 78. “Nomidisc” LLC 39. “Dega” LLC | Hatis str. commercial area No. 1/69, Abovyan, Armenia | 40. “Dramatun” LLC 79. “Shogh” LLC 41. “EuroCredit Capital” LLC 80. “Voske Luma” LLC 42. “MVM Anna” LLC 81. “Voske Vtak” LLC 43. “Express VIP Service” LLC 82. “White-Soliter” LLC 44. “Trust Credit” LLC 83. “Uster Geghanik” LLC 45. “Trader” LLC 84. “Proffinance” CJSC | Tigran Mets., office area No. 13/10, Yerevan, Armenia | 85. “Jangai” LLC 46. “Trader” LLC 86. “Real Credit” LLC | Tigran Mets ave., bld. 43, office area No. 11, Yerevan, | Khorenatsi str. bld. 1, Gyumri, Armenia | Armenia | 87. “Real Credit” LLC 47. “Zhirair Aharonyan” Private Entrepreneur | Sayat-Nova str. bld. 9/9 a, Basement No. 16, Gyumri, 48. “Easy Credit” LLC Armenia | 49. “Inrim Credit” LLC 88. “Royal Credit” LLC 50. “Invest Service Group” LLC 89. “ROYAL FINANCE GROUP” LLC 51. “Legat Credit” LLC 90. “S.U.R. - 72” LLC 52. “Leylo” LLC 91. “Sargis & Nana” LLC 53. “Lombardia” LLC 92. “Serve - Edar” LLC 54. “Lombardstreet” LLC 93. “Sicor” LLC 55. “Cay-Man” LLC 94. “Simnor” LLC 56. “Karen Mets” LLC 95. “SSS Credit” LLC 57. “Karen Yaralyan” LLC 96. “V.I.A” LLC 58. “Kartush-At” LLC 97. “Vagr” LLC 59. “Klouzh” LLC 98. “Vantig” LLC 60. “Credit Alliance” LLC 99. “Venus Athena” LLC 61. “Credit City” LLC 100. “Via-Gold” LLC 62. “No. One Pawnshop” LLC 101. “Wilmar Mek” LLC 63. “Hot Credit” LLC 102. “TER-YESAYAN ASSOCIATION” LLC 64. “Huso Lusniak” LLC 103. “Five Minute” LLC 65. “Malen” LLC 104. “Fast Cash” LLC 66. “Mamma-Mia” LLC 105. “LOMBARD PLUS” LLC 67. “Manioka” LLC 106. “MVM-FINANCE” LLC 68. “MARIUS” LLC 107. “VARD GRIG” LLC 69. “Marlia” LLC 108. “Armenuhi Arakelyan” Private Entrepreneur 70. “Max Credit” LLC 109. “Narine Arzumanyan” Private Entrepreneur 71. “Megatron” LLC 110. “Sedrak Gagik Muradyan” Private Entrepreneur 72. “Micro Capital” LLC 111. “Lianna Danielyan” Private Entrepreneur
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List of Organizations Which did not Sign the Covenant 112. “Julieta Ohanyan” Private Entrepreneur 35. “Arsen Galstyan” Private Entrepreneur 113. “Era Line” LLC 36. “Arsen Papyan” Private Entrepreneur 114. “Money Credit” LLC 37. “Artak Yesayan” Private Entrepreneur 115. “Igit Sedrak Igityan” Private Entrepreneur 38. “Artyom Davtyan” Private Entrepreneur 116. “ED-HAK” LLC 39. “Arpine Taguhi” LLC 117. “Morvik” LLC 40. “BASENI GOVQ” LLC 118. “Voske Vtak” LLC 41. “BEGO TRANS” LLC 42. “Berkut 555” Commercial Undertaking Foreign exchange dealers 43. “Gagik Jndoyan” Private Entrepreneur and exchange offices 44. “Gazprom Armenia” CJSC 1. “GROSS REALTOR” LLC 45. “Gayane Askaryan” Private Entrepreneur 2. “Azat Khachatryan” Private Entrepreneur 46. “Gegham Arqa” LLC 3. “Azatuhi Blikyan” Private Entrepreneur 47. “GNTUNIQ” LLC 4. “Albert Papoyan” Private Entrepreneur 48. “Gorik Stepanyan” Private Entrepreneur 5. “Alex-Holding” LLC 49. “Gvidon Lazaryan” Private Entrepreneur 6. “ALS Erzrumtsi” LLC 50. “EUROPARK TRADE CENTER” JSC 7. “Anahit Virabyan” Private Entrepreneur 51. “Zaven Chagharyan” Private Entrepreneur 8. “Anatoly Sahakyan” Private Entrepreneur 52. “ANN. PA” LLC 9. “Andaco” LLC 53. “Khachatur Ghahramanyan” Private Entrepreneur 10. “Andranik Hakobyan” Private Entrepreneur 54. “Khachatur Petrosyan” LLC 11. “Andranik Mkrtchyan” Private Entrepreneur 55. “TSIATSAN” LLC 12. “Andrey Shaqaryan” Private Entrepreneur 56. “CAPITAL TRADER” LLC 13. “Anush Zaqaryan” Private Entrepreneur 57. “KAREN ANNA & FAMILY” LLC 14. “Ashot Harutyunyan and Sons” LLC 58. “Karen-5” Commercial Undertaking 15. “AUTO PLAZA” LLC 59. “Karin Gohar” LLC 16. “Aram Araqelyan” Private Entrepreneur 60. “Karine Araqelyan” Private Entrepreneur 17. “Aram Barseghyan” Private Entrepreneur 61. “Kon-Brosel” LLC 18. “Arthur Arakelyan” Private Entrepreneur 62. “KRPAK” LLC 19. “Arthur Danielyan” Private Entrepreneur 63. “Hakob Hovhannisyan” Private Entrepreneur 20. “Arthur Kochinyan” Private Entrepreneur 64. “Hamlet Barseghyan” Private Entrepreneur 21. “Aristakes Atoyan” Private Entrepreneur 65. “Hayastan” Trade Center 22. “Ardzaganq” LLC 66. “Hayrapetyan Brothers” CJSC 23. “ARM & ART CHANGE MARKET” LLC 67. “HASARA” LLC 24. “Arman Baghdasaryan” LLC 68. “Hasmik Balasanyan” Private Entrepreneur 25. “Arman Qosyan” Private Entrepreneur 69. “Hasmik Tadevosyan” Private Entrepreneur 26. “Armen Bairamyan” Private Entrepreneur 70. “Harutyun Arsenyan” Private Entrepreneur 27. “Armen Yenoqyan” Private Entrepreneur 71. “Harutyun Harutyunyan” Private Entrepreneur 28. “Armen Hamik Brothers JV” LLC 72. “Hovhannes Khachatryan” Private Entrepreneur 29. “Armen Maleryan” Private Entrepreneur 73. “Hovsep Harutyunyan” Private Entrepreneur 30. “Armen Mkhitaryan & Friends” JSC 74. “Hrachik Hakobyan” Private Entrepreneur 31. “Armenia” Hotel Complex CJSC 75. “Hrachia Araqelyan” Private Entrepreneur 32. “Armenia” International Airports 76. “Hrachia Hakhverdyan” Private Entrepreneur 33. “Armine Marabyan” Private Entrepreneur 77. “Hrachia Minasyan” Private Entrepreneur 34. “Arsen Bareghamyan” Private Entrepreneur 78. “Manouk Sargsyan” Private Entrepreneur
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List of Organizations Which did not Sign the Covenant 79. “Mill AG” CJSC 123. “CATRINE GROUP” LLC 80. “Yotniak” LLC 124. “Armine Khachatryan” Private Entrepreneur 81. “Nairi Matinyan” Private Entrepreneur 125. “NAR-AR” LLC 82. “Norayr Martirosyan” Private Entrepreneur 126. “Platin” LLC 83. “VOSKE GETAK” LLC 127. “ZIM” LLC 84. “PARMA” LLC 128. “Voske AGA” LLC 85. “PLAZA SYSTEMS” CJSC 86. “GIANT TRADE” LLC Investment firms 87. “Jemma Baghramyan” Private Entrepreneur 1. “Alphasecurities” LLC 88. “Juliette Gabrielyan” Private Entrepreneur 2. “ARMENBROKE” JSC 89. “R.G.A.T” LLC 3. “Divisa AM” CJSC 90. “REGENTS CAPITAL” LLC 4. “Capital Investments” CJSC 91. “Rudik Khachatryan” Private Entrepreneur 5. “Cube Invest” CJSC 92. “Ruzanna Arakelyan” Private Entrepreneur 6. “Renessa” CJSC 93. “Sahak Hagoyan” Private Entrepreneur 7. “Tonton” Investment LLC 94. “Samvel Amirjanyan” Private Entrepreneur 8. “Prime Capital” Investment LLC 95. “Samvel Ghazaryan” Private Entrepreneur 9. “Future Capital Market” LLC 96. “Sedik Sahakyan” Private Entrepreneur 97. “Sergei Aghayan” Private Entrepreneur Investment fund managers 98. “Sev Kakach” Commercial Undertaking 1. “Amundi-ACBA Asset Management” CJSC 99. “SIMAO” LLC 2. “C-Quadrat Ampega Asset Management Armenia” 100. “Smbat Aslanyan” Private Entrepreneur LLC 101. “SPARAPET” LLC 102. “Stoic” LLC Money transfer organizations 103. “Valeri Navasardyan” Private Entrepreneur 1. “TEL-CELL” CJSC 104. “Vahagn Khachatryan” Private Entrepreneur 2. “IDRAM” LLC 105. “VAGHARSH & SONS CONCERN” LLC 3. “EASY PAY” LLC 106. “Vatou” LLC 4. “HayPost” CJSC 107. “Vardan Baghdasaryan” Private Entrepreneur 5. “MONEYTUN” LLC 108. “Vardan Vardazaryan” Private Entrepreneur 6. “Mobi Dram” CJSC 109. “VARDAN & MONIKA” LLC 110. “Vardan Ghazaryan” Private Entrepreneur Credit bureau 111. “Varuzhan Avetisyan” Private Entrepreneur 1. “ACRA Credit Reporting” CJSC 112. “VLV CENTER” LLC 113. “VHM” LLC Insurance bureau 114. “TASHIR INVEST GROUP” CJSC 1. “Armenian Motor Insurers’ Bureau” Union of Legal 115. “Tigran Sargsyan” Private Entrepreneur Entities, ULE 116. “Tigran Vahradyan” Private Entrepreneur 117. “Trabsdealer” LLC 118. “TUNAR” CJSC 119. “TUREX GOLD” LLC 120. “Parandzem Hakobyan” Private Entrepreneur 121. “PSR” LLC 122. “PRETTY WAY” LLC
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List of Organizations Which did not Sign the Covenant "Elite Plaza" Business Center 7th floor 15 M. Khorenatsi street, 0010 Yerevan, Armenia
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