On 1 January 2003 the Act No. 229/2002 Coll., on the Financial Arbiter, came to legal force (hereinafter referred to as the Act). In accordance with this Act the institution of the Financial Arbiter of the Czech Republic was established with effect as of 1 January 2003. It is a special body for so called out-of-court settlement of complaints which could arise between payment services providers and their clients or between issuers and users of electronic payment instruments. Thus the relevant provisions of the Act No. 124/2002 Coll., on Transfers of Funds, Electronic Payment Instruments and Payment Systems (hereinafter referred to as the Payment System Act) were satisfied. The Financial Arbiter was established during the process of harmonizing the Czech Republic laws with European Union states as the European Community Directive No. 97/5/EU, on cross-boarder transfers, requires the possibility for consumers to settle disputes in an efficient and appropriate manner with transfer institutions through out-of-court procedures. The openess towards the public is an important feature of Finacial Arbiter activities. This institution has a preventive function as well, as it can either directly advise respective institutions of insufficiencies in their functioning or it can notify the supervision body of prevailing insufficiencies. The Financial Arbiter may impose a fine upon the institution of up to CZK 1 million, and yet can do so repeatedly.