Unfair commercial practice (misseling) as a barrier to the ESG transformation of the Russian banking business

Abstract

The article is devoted to a little-studied phenomenon of the modern financial system, called “mis-seling”, which is a series of interrelated unfair practices and methods of selling financial services that cause significant damage to the reputation of Russian banks and undermine the long-term loyalty of their customers. The purpose of this article is to reveal the essence of misselling as a complex legal, social, commercial and financial phenomenon, study its forms and methods, analyze the reasons for its spread in Russia, and develop proposals for protecting consumers from these practices. Achievement of articles’ purpose is ensured by use of the historicalgenetic research method, analysis of the leading experts’ publications and regulatory documentation in the field of responsible finance, generalization of empirical monitoring studies on the rights of financial services consumer protection. Results: a reconceptualization of mis-selling was carried out, which made it possible to give an expanded interpretation of this phenomenon as unfair commercial practice that violates consumer rights and contradicts the principles of responsible business conduct. It is shown that the prospects for large-scale ESG-transformation of the banking business, its restructuring on the principles of sustainable development, to a decisive extent depend on the solution of tasks to strengthen consumer protection. Conclusions: the implementation of the course towards the development of a modern, efficiently functioning financial sector of the economy, based on the principles of trust and competition and using tools that meet the needs of stakeholders, involves strengthening the social orientation of the development of the banking business, which will be facilitated by: a serious modernization of the consumer protection system, measures to expanding the jurisdictional powers of the Bank of Russia in the field of preventing administrative offenses, improving non-financial reporting and increasing the financial literacy of the population of the country.