Banking malpractice claims and disputes represent one of the most relevant and complex areas of law in Georgia. The relationship between banks and clients is often characterized by an imbalance of power, where financial institutions possess significant resources and informational advantages. Banking malpractice refers to the failure of a bank or its employees to perform professional duties, negligence, violation of legislation, or bad faith actions that result in financial loss to the client. This service covers the protection of client rights in cases such as unfair contract terms, unauthorized deduction of funds from accounts, provision of incorrect financial advice, breach of confidentiality, and disregard for regulatory norms. While the banking sector in Georgia is strictly regulated, in practice, there are frequent instances where consumer rights are violated, requiring qualified legal intervention to recover damages and restore justice.
What Does the Banking Malpractice Claims Service Cover?
Lawyers specializing in banking malpractice ensure the protection of client interests across a wide range of disputes. This service covers:
- Challenging Unfair Terms: Invalidating clauses in loan or deposit agreements that violate consumer rights or contradict principles of good faith.
- Unauthorized Transaction Disputes: Establishing bank liability for funds lost due to cyberattacks, phishing, or internal fraud when the bank failed to provide adequate security measures.
- Mis-selling Claims: Seeking compensation for the sale of financial products that did not match the client's risk profile or whose terms were not fully explained.
- Reviewing Fees and Penalties: Challenging disproportionate penalties, hidden fees, or illegal changes to interest rates imposed by the bank.
- Breach of Confidentiality: Recovering material and moral damages caused by the disclosure of banking secrets.
Common Scenarios and Real-World Examples
In banking malpractice practice, we often encounter the following situations:
- Security System Failures: A large amount of money was transferred from a client's account via internet banking to a fraudulent account. The bank denies liability, but investigation reveals that the bank's security system failed to identify the suspicious transaction.
- Unilateral Changes: Based on a vague clause in the contract, the bank increased the loan interest rate without prior notice to the client or offering refinancing options.
- Improper Performance of Obligations: A business client instructed the bank to execute an international transfer, which was delayed due to a bank error, causing the client to lose a contract with a partner.
- Illegal Asset Disposal: The bank initiated the auction of collateral (real estate) in violation of statutory warning periods and procedures.
Georgian Legal Framework
The regulation of banking malpractice is based on several legislative acts. Primarily, the Civil Code of Georgia defines general principles of contract law, including the obligation of good faith. From special legislation, the Law on Activities of Commercial Banks and the Organic Law of Georgia on the National Bank of Georgia are notable, establishing the banking supervision framework. Of particular importance is the Law of Georgia on Protection of Consumer Rights, which mandates transparency from banks and prohibits aggressive commercial practices. Additionally, orders and regulations of the National Bank of Georgia (for example, the Rule on Protection of Consumer Rights while Rendering Services by Financial Organizations) create specific standards for bank liability.
Service Process: What to Expect
Working with a specialist begins with a detailed study of the case and analysis of contracts. The first step is often submitting a formal claim (complaint) to the bank's internal audit or claims management department. If the bank's response is unsatisfactory, the case may be referred to the Dispute Resolution Commission at the National Bank of Georgia (if the subject of the dispute meets the criteria) or to the court. The lawyer will draft the lawsuit, collect evidence (including financial expertise), and defend your interests until the process is concluded. The goal is not only compensation for damages but also the restoration of violated rights.
Why Choose Legal.ge?
Disputing with banks requires specific knowledge and experience, as they possess strong legal teams. Legal.ge gives you access to independent lawyers who have years of practice in handling banking disputes. Through our platform, you will find professionals who are not afraid to confront financial giants and use every legal lever to protect your interests. Trust verified specialists on Legal.ge to achieve justice.
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