Russian consumer rights watchdog says foreign-currency mortgage holders are on their own

The Russian consumer rights watchdog, Rospotrebnadzor, which previously fervently defended foreign-currency mortgage holders, has now changed its position and has decided that such loan contracts are contrary to the country’s civil code and Consumers’ Rights laws, meaning that those people who are having difficulty making payments in light of a significantly weakened ruble no longer have the watchdog’s support.

This new position was communicated in a written reply to a request by private mortgage borrowers from the Belgorod region. In the letter, Rospotrebnadzor pointed out that such loans contract between banks and borrowers are based on “voluntary self-commitment” and are made in strict accordance with the country’s civil code. The letter also stressed that it's perfectly legal to expect borrowers to make payments based on the ruble-to-dollar exchange rate on the day that a payment is due, as opposed to the exchange rate at the time a contract was signed.

However, Rospotrebnadzor consumer rights head Oleg Prusakov did write that the legality of these contracts does not mean that they cannot be challenged in court.