Republic of Armenia, Draft Law on Financial Ombudsman: Desktop Review

Abstract

Ombudsman schemes for the protection of consumer rights are present in many countries, particularly in the area of European financial services. One of their primary objectives is to reduce legal costs for both the consumer and the regulated industries when a dispute arises between the parties. Ombudsman schemes can also result in decisions being made more quickly, either through mediation conducted by the ombudsman or through a decision made by the ombudsman after reviewing the case. Moreover, as the office of ombudsman develops experience in various subject areas, decisions can be well-informed, consistent, proportionate, and fair to both parties. This can be more efficient than case-by-case decision making in courts of general jurisdiction.Although the EU has not enacted binding legislation harmonizing the various ombudsman schemes in its Member States, there has been an effort to set forth the basic principles that such schemes should include. In 1998, the EU Commission issued Recommendation 98/257/EC “on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes.” This paper reviews the draft law of Armenia on consumer ombudsmen in light of the EU standards and concludes that several modifications should be made to conform to EU norms.