A million dollar story. Or at least 120,000 euro!

This story is an allusion to the god of wealth, Plutos, from ancient Greek mythology. And there is no other way to announce the events that happened to our client. Judge for yourself! 

After making his standard payments via mobile banking and preparing for bed, our client noticed the servicing bank's favorable rate for selling and buying euro. With a need for foreign currency, he took advantage of the offer, and after an hour and a half of conversion transactions, his account balance increased from 15,000 rubles to 120,000 euro. One can only guess what numbers he would have accumulated on his account, but the exchange rate leveled off and became less appealing. The client kept some of the currency in the account while transferring the rest to another bank. 

He discovered in the morning that his access to the online bank had been blocked. And the bank security officer who called, citing a technical glitch, graciously offered to refund all the money. 

The client's questions that we were approached with are obvious given the situation. But by the time of the appeal, another detail had appeared. The client used the money to pay off all of his existing obligations (mortgage, car loan, monetary debt to an individual), and he no longer had the option of returning it. 

An analysis of judicial practice has shown that when resolving similar cases, the law enforcement officer pays special attention to the parties' conscientious behavior as well as the following factual circumstances. 

• What is the client's intention: to purchase the required currency or to profit from the exchange rate difference as a result of purchases and sales?
• The frequency of customer transactions and their consistency with the customer's previous business behavior.
• Marketability of the bank's exchange rates and their correlation with the official rate established by the Central Bank of the Russian Federation.
• Client awareness of technical work: Was the client informed in advance about the incorrect operation of the service?
• Evidence of a software failure or proven intent by bank employees or third parties to set erroneous or incorrect exchange rates. Or proof of force majeure circumstances. 

At the same time, the courts emphasize that, as a general rule, paragraph 5 of Article 10 of the Russian Federation's Civil Code requires the conscientiousness and reasonableness of participants in civil legal relations. And the bank bears the burden of proving circumstances indicating that the client abused his or her rights. As a result, the courts' conclusions about facts of legal significance for the case should not be general and abstract, but rather persuasively stated in the judicial act with reference to regulatory legal acts and evidence that meet the requirements of relevance and admissibility. 

So, for example, in the decision of the Second Cassation Court of General Jurisdiction from November 23, 2023 in case No. 8G-31623/2023, the court arrives at the conclusion that the mere fact that the cross rate of currencies was lower than that established by the Central Bank of the Russian Federation does not indicate that the plaintiffs violated the law, because under the Federal Law “On Currency Regulation and Currency Control”, credit institutions conducting foreign exchange transactions have the ability to independently determine the rate used for transactions with their clients. In the absence of notification to the client about the establishment of an incorrect exchange rate before such transactions are carried out, dishonesty is not evident in the client's actions. 

In case No. 8G-22640/2023, the Seventh Court of Cassation of General Jurisdiction ruled on January 11, 2024, and concluded that the bank claimed that the currency conversion operations were completed in a short period of time. The fact that the bank established unfavorable cross-currency exchange rates for itself does not prove the plaintiff's guilt. The fact that the transaction proved to be economically unprofitable for the bank conducting business activities does not deprive the plaintiff of the right to engage in conversion transactions that benefit him, given his lack of ability to influence the bank's cross rates. The defendant did not provide evidence of a technical failure that resulted in the establishment of exchange rates; rather, the bank representative pointed out errors made by employees when setting these rates. 

No less interesting is the Moscow City Court's ruling from June 28, 2023 in case No. 33-29526/2023, in which the court comes to the following conclusion: The defendant failed to provide evidence of force majeure circumstances. Furthermore, they did not deny that an incorrect exchange rate was established as a result of errors made by bank employees when setting and updating specific conversion rate values, so the court of first instance concluded that the situation in which the bank suffered losses was caused by the bank itself. The court of first instance did not establish the plaintiff's guilt. The plaintiff, as a consumer of a financial service, transacted for the purchase and sale of currencies at the price offered by the bank, and was not required to express reservations about the terms of the contract proposed by the strongest party in the existing legal relations. Furthermore, the court of first instance noted that the completed transactions were not challenged or declared invalid. 

The ruling issued yesterday by the Judicial Collegium for Civil Cases of the Armed Forces of the Russian Federation in case No. 4-KG24-3-K1 from March 12, 2024, is also encouraging. The Supreme Court of the Russian Federation overturned the judicial acts of the appellate and cassation instances that supported the credit institution and referred the dispute for a new consideration to the Moscow Regional Court in a similar dispute between Tinkoff Bank and a client who made money on the exchange rate difference, which the bank considered a malfunction in the operation of its software (at the time of preparation of the material the text had not yet been published). 

The client received comprehensive consultation with a selection of diverse judicial practice on the issue studied. In the absence of a compromise in negotiations with the bank, they decided to seek our assistance in protecting their rights in pre-trial and judicial proceedings. To be continued.