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HOW CAN WE INITIATE THE PROCEDURE OF THE FAB?

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How can we initiate the procedure of the Hungarian Financial Arbitration Board (FAB)? 

Below, you can familiarise yourself with the preconditions of starting a procedure before the Hungarian Financial Arbitration Board.

If you have a consumer dispute of a financial nature you can initiate the out-of-court procedure of the Hungarian Financial Arbitration Board, if:

·         you qualify as a consumer, i.e.: you are a natural person who is acting for purposes which are outside your trade, business or profession (sole proprietors, sole traders, corporations, legal entities, home owners associations do not qualify as consumers) and

·         your dispute is against a financial service provider (bank, other credit institution, insurance company, financial enterprise, fund, investment firm) that is overseen by the Central Bank of Hungary (Magyar Nemzeti Bank), and

·         the dispute in question is considered a consumer dispute of a financial nature, i.e.: it regards the conclusion or performance of the contract for services that was concluded between you and the financial service provider.

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Cases against debt management companies: petitions regarding debt management companies only belong to the Hungarian Financial Arbitration Board’s jurisdiction if it concerns a financial services contract. Eg.: cases that regard claims arising from a defective merchandise, parking ticket etc., belong to the jurisdiction of the general conciliation boards.

Cases of equity: Cases, in which the petitioner is asking the financial service provider – based on his personal, financial circumstances – to forgive partially or entirely his debt or to get better contract terms (e.g.: lower or zero % interest rate, or to pay in monthly installments instead of a lump sum). It is very important to know that the Board is not in the position to issue a binding resolution or a recommendation in these cases. The parties either conclude a settlement agreement that is approved by the Board or in case the parties don’t agree, the procedure will be terminated.

Cross border cases: The Hungarian Financial Arbitration Board, which is a member of FIN-NET may be able to help resolve your complaint out of court if you live in the European Union, Iceland, Liechtenstein or Norway, and you have a complaint against a financial services provider in Hungary, or vice cersa. The additional condition to start a cross border procedure is that the EEA resident financial service provider must submit itself to the procedure and the binding resolution of the Board.

Online Dispute Resolution Platform (ODR Platform): If you have a dispute with your financial service provider that is related to obligations arising from online service contracts, you may take advantage of the Online alternative dispute resolution forum for (financial) consumer disputes, or the so called ODR Platform. The Online Dispute Resolution (ODR) Platform is provided by the European Commission to help you resolve disputes without going to court. It can be used for any contractual dispute arising from online contracts where the parties to the dispute are both based in the EU or Norway, Iceland, and Liechtenstein. First, you have to register and create an EU login, that you can reach here. To start a procedure, the Hungarian Financial Arbitration Board requires you to turn to your financial service provider first with your complaint before you initiate the procedure of the Board.

If you haven’t done it yet, please submit a complaint at your financial service provider

In your complaint, please clearly indicate your problem with the procedure/services of the financial service provider, and attach all documents that may prove your point. Make sure that you clearly state what you would like the financial service provider to do in order to solve the problem.

If you are not satisfied with the response of the financial service provider, or within 30 days you have not heard from your provider, you may initiate the procedure of the Hungarian Financial Arbitration Board.

 

Fill out the appropriate petition form to initiate the procedure

The Board’s procedure must start with the written petition of the consumer.

For general financial consumer dispute resolution, please use form „150 General Consumer Petition”.

For petitions for equity, please use form „180 Petition for Equity”.

For cross border cases, please use FIN-NET form for cross -border financial services complaints

The forms can be reached by clicking on the following link, or you may request a free copy from your financial service provider. Also, at the Customer Service of the Central Bank of Hungary, or at the partners of the MNB, at the Financial Advisory Offices you may request guidance free of charge on how to fill out the forms and assemble your case file.

 

Send the filled out form to the Hungarian Financial Arbitration Board

The filled out form may be sent via post to the Hungarian Financial Arbitration Board (Address: H-1525 Budapest, 172.) or may be submitted in person at the Customer Service of the Central Bank of Hungary (H-1013 Budapest, Krisztina krt. 39.), furthermore in any Bureau of Civil Affairs in Hungary.

It is important to know, that the Board does not accept petitions through e-mail. If you would like to submit your petition in an electronic form, you may use the electronic government portal of Hungary after registration (www.magyarorszag.hu).

For any contractual dispute arising from online contracts you may initiate of the procedure of the Hungarian Financial Arbitration Board at the online dispute resolution platform of the European Commission.

 

Make yourself familiar with the procedure of the Hungarian Financial Arbitration Board

At first, the Hungarian Financial Arbitration Board examines if the petition complies with all the legal requirements. If yes, the petition is admitted and the procedure would start.

If the petition does not comply with the provisions of the law, the acting panel returns the petition to the petitioner for supplementation, specifying the shortcomings.

The acting panel rejects the petition without fixing a hearing, if there is pending action between the parties based on the same facts for the same right, or already a non-appealable judgment has been passed on the subject thereof; or if the proceeding of the Board has been initiated before and it was closed by a resolution. Equity petitions can be admitted despite of the fact that there is pending action between the parties based on the same facts for the same right, or already a non-appealable judgment has been passed.

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The procedure of Board is free of charge, but the incurred costs (if any) are borne by the parties. The parties may act in the proceedings at Board in person or through a proxy, the latter does not have to be a legal professional. 

The Board forwards the petition of the consumer to the financial service provider and calls upon the provider to submit an answer regarding the merits of the case, and sets a date for a hearing within 75 days. The location of the hearing is in Budapest, Váci út 76., at the ground floor of the Capital Square Office Building. The hearing provides an opportunity for a face to face consultation for the parties, and of course to conclude a settlement agreement. At the hearing the representative of the financial service provider must be present.

The time frame for the procedure is 90 days, which is calculated from the day of receiving the complete petition. The time spent on supplementation by the complainant does not count towards the procedural time limit. The chair of Board may prolong this deadline on one occasion per case by maximum 30 days at her own discretion. The average processing time of the petitions is usually between 50-60 days, so there is an opoortunity to settle a dispute with the financial service provider even within 2 months. 

The Board approves the settlement agreement of the parties in a resolution if the settlement complies with the laws. In the absence of a negotiated settlement the Board shall adopt a binding decision, make a recommendation, or shall terminate the procedure.

The Board shall adopt a binding decision on the merits of the case, if the request is found substantiated, and the financial service provider has undertaken to be bound by the decision of the Board in a standard statement of submission - filed at the Board, or contained in its commercial communication - or in a statement filed at the time of the opening of the proceedings or, at the latest, before the decision is adopted.

The Board shall make a recommendation on the merits of the case, if the request is found substantiated, but financial service provider has refused to be bound by the decision of the Board in a statement filed at the time of the opening of the proceedings, or did not declare its position concerning the decision of the Board in terms of submission.

In addition to the above, the latest amendment to the MNB Act - in effect from January 1, 2017 - authorizes the Board to issue binding resolutions in cases where the consumers’ claims are susbtantiated and they (at the time of submitting the complaint and at the conclusion of the Board’s procedure) do not exceed 1 million HUF (approx.: 3.230,- EUR).

The Board may terminate the proceedings, if the consumer withdraws the request, the parties agree on the termination of the proceedings, continuation of the proceedings becomes impossible, continuation of the proceedings is not necessary, if so deemed by the council for any reasons, including if the request is found to be unsubstantiated, or in cases where the Board should have rejected the consumer’s application in writing, without a hearing.

In equity cases, the parties either conclude a settlement agreement that is approved by the Board or in case the parties don’t agree, the procedure will be terminated.

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