Ombudsman scheme for financial services disputes in Switzerland – first Ombudsman’s offices recognised by the Federal Department of Finance

Nino Sievi
Nino Sievi

On 24 June 2020, the Federal Department of Finance finally recognised the first Ombudsman’s offices. Under the newly introduced FinSA, financial services providers must now join one of these recognized offices. It is to be expected that customers will frequently refer their cases to an Ombudsman in order to get a first assessment of their case and find an agreement with the service provider.

The recently introduced FinSA (Federal Act on Financial Services) foresees a new mechanism for the settlement of disputes between customers and financial service providers. Such disputes should be settled by an ombudsman's office, if possible within the framework of a conciliation procedure or mediation (art. 74 FinSA). In line with this, financial service providers must affiliate to an ombudsman's office (art. 77 FinSA) and inform their clients of the possibility of initiating mediation proceedings before a recognised ombudsman office (art. 79 FinSA).

At the time when the FinSA entered into force (1 January 2020), there were no Ombudsman’s offices recognised by the Federal Department of Finance. Accordingly, financial service providers were unable to affiliate to an ombudsman’s office as foreseen by the FinSA.

On 24 June 2020, the Federal Department of Finance finally recognised the first Ombudsman’s offices (see here). Financial service provider must join one of the recognised Ombudsman’s offices until the end of December 2020. Importantly, foreign entities that provide cross-border services for clients in Switzerland must also join an Ombudsman's office.

The proceedings before the ombudsman are initiated by a mediation request. The proceedings shall follow the principles of mediation and be straightforward, fair, quick, impartial and inexpensive or free of charge for the client. Some Ombudsman’s offices have published procedural rules that they will follow (see e.g. here).

Ideally, the parties will reach an agreement during the proceedings before the Ombudsman. If an agreement is not reached or there appears to be no prospect of such, the ombudsman may give the parties his own factual and legal assessment of the dispute based on the information available. Should the parties still be unable to find an agreement, the customer may proceed to court without having to initiate any further conciliation proceedings (art. 76(2) FinSA).

While Ombudsman’s offices have been around for quite some time in the banking and insurance industry, the FinSA reinforces their role in the resolution of disputes. Their reach has been extended to include all financial service providers. Further, the duty of inform a customer about the option of bringing a mediation request to an Ombudsman should also lead to an increase in case numbers. Finally, since the proceedings are rather inexpensive for customers (see. e.g. rules on costs of OFDL requiring payment of CHF 100-250 by a customer), I expect customers to make wide use of referring their case to the Ombudsman’s offices.

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