Descriere: In the first half of 2024, Romanians filed close to 1,900 applications for negotiation with banks and NBFIs. This means 20% more than in the first half of 2023. The number of negotiation cases (applications accepted by banks) reached 524, going up by 24% compared to H1 2023. The increase is even higher for resolutions (+31%). In 444 cases, the consumers came to terms with their banks, after both sides accepted the solution proposed by conciliators. The decrease in the number of direct settlements (172 such cases/H1 2024 vs 290 such cases at the end of H1 2023) and the increase in the number of negotiation cases shows that, in the first half of this year, banks preferred to address more issued raised by their customers via ABDRC, rather than inviting them to the bank for a direct settlement.

The number of applications received in the first six months of the year (1,892 applications) shows an increase in the current year by approximately 20% compared to the first half of 2023 (1,572 applications). The gradually downward trend of inflation, as well as the continued high ROBOR and IRCC indices, on the basis of which the monthly instalments to be paid on variable-rate loans are calculated, have been the context in which some consumers have continued to experience actual payment difficulties, and these justified circumstances have meant that solutions to rebalance contractual obligations have had to be found (requests being sent directly to creditors or made through the ABDRC).

Of the total number of applications received before the end of the first half of 2024, 1,318 concerned different issues in relation with banks, whereas 574 concerned different issues in relation with NBFIs.

Thus, the share of applications to NBFIs fell slightly below last year’s reference period: from 35% of total/H1 2023 down to 30% of total/H1 2024.

Moreover, the share of applications intended at banks is has had a slight increase during the two compared periods: 65% of the total/at the end of H1 2023, and 70% of the total/H1 2024.

In this statistical slot, we need to highlight also that, in the first six months of this year, the applications for deregistration from the Credit Register (CR) observed an evolution similar to that of the last year.

At the end of H1 2024, we see 669 applications for deregistration from the CR (249 intended at banks + 420 intended at NBFIs), while the number of this type of application observed at the end of H1 2023 was 628. It should be recalled that most of the applications concerning issues in relation to the Credit Office, the First House programme or assigned loans are closed because, on a case-by-case basis, these are governed by a special piece of legislation which leaves but limited or even no room whatsoever for negotiation.

The total number of cases formed at the end of H1 2024 reached 524, all involving banks (compared to the first six months of 2023, when 422 cases were formed, which means an increase by 24% in the current year). Of the cases formed this year and settled until the end of the reference period, 444 concluded with a resolution (the parties accepted the solution proposed by the conciliator), while other 57 cases are still being processed. In 14 cases, one of the parties rejected the solution rendered by the conciliator and a report was issued, whereas in 9 cases, one of the parties withdrew.

The share of cases resolved and concluded with a resolution (with the parties coming to terms) exceeds the figure of the similar period of last year. This year, the reported number of resolutions is 444, compared to the similar period of the previous year, when only 339 resolutions were reported (a 31% increase this year).

Furthermore, before the end of the first half (H1) of 2024, 172 applications were settled amicably by traders after the respective cases having been referred to ABDRC (traders negotiated directly with consumers), broken down as follows: 91 applications settled amicably with banks, and 81 applications settled amicably with NBFIs.

At the end of the H1 of this year, we counted 1,224 enquiries made by phone, and 210 persons/consumers accessed the chat function on the website of ABDRC.

The status of claims against merchants is as follows:

Banks:

• 1,318 compliant applications;
• 345 non-compliant applications;
• 920 requests for miscellaneous information.

Classification of the 1,318 compliant applications:

• 524 cases formed at the end of H1 2024 (23 care are formed in 2024 from applications received at the end of 2023);
• 164 in screening phase – documents are being reviewed;
• 91 applications were settled amicably by the parties, but this after the consumer having first referred the case to ABDRC;
• 484 cases were closed;
• 78 applications were joined.

Classification of the 524 cases undergoing the procedure with proposed solution/conciliation:

• 444 resolutions rendered – the parties reached an agreement;
• 57 cases in the processing phase;
• 14 reports – the parties did not come to terms;
• 9 casefile in which one of the parties withdrew.

Means of submitting compliant applications:

• 571 were submitted via the app (website);
• 715 were emailed;
• 9 were mailed;
• 23 were brought to, and registered by consumers with, the office of ABDRC.

NBFIs: 

• 574 compliant applications.

Classification of the 574 compliant applications:

• 0 cases formed at the end of H1 2024;
• 51 applications in the screening phase;
• 81 applications were settled amicably between NBFIs and consumers, after the consumer having first approached ABDRC;
• 442 were closed – rejected by the NBFIs.

Means of filing compliant applications:

• 542 were submitted via the app (website);
• 28 were emailed;
• 4 were mailed;
• 0 were brought to, and registered by consumers with the office of ABDRC.

The applications received from consumers covered the following topics:

• Problems in connection with credit products:

• • Credit Office (deregistration from CO);
  • Refunds (of fees/commissions, interest);
  • Shift from ROBOR to IRCC;
  • Reduction of loan principal/debt/instalment, or writing off overdue amounts;
  • Rescheduling/refinancing/staging-out;
  • Agreement renegotiation/rebalancing (including for hardship);
  • Finding a solution to address the problems (in general);
  • Conversion of the loan currency;
  • Problems with insurance policies (bancassurance);
  • Interest recalculation;
  • Payment commitments;
  • Maturity acceleration;
  • Removal of certain clauses.

• Operational problems:

• • Problems with operation of the ATMs (including refunds);
  • Problems in connection with wire transfers and refunds of transaction fees;
  • Refunds in case of processing errors;
  • Recovery of amount wrongly transferred by consumers (internet banking);
  • Provision of clarifications about calculation of the amounts withdrawn by banks from the credit card account;
  • Other card-related problems (cancellation/name change);
  • Problems in connection with the exchange rate and interests charged when using the cards abroad;
  • Problems regarding inter-banking transfers.

• Problems related to other types of activities:

• • Problems in connection with forced execution (suspensions/stays of proceedings);
  • Requests to be issued documents (repayment schedules, statements of account, etc.);
  • Refunds of garnished amounts;
  • Mortgage deregistration;
  • Fraud committed via bank channels.

The main reason for closing an application is the refusal of traders to have the dispute settle via ADR procedure, and the reasons for closing fall into several categories:

• Good reasons (main) – the application concerns:
  • deregistration of entries from the Credit Office;
  • “First House” loans;
  • assigned claims;
  • the state premium under saving-credit contracts.

• Reasons related to consumers:
  • selection of a trader the business of which is not regulated by the National Bank of Romania;
  • selection of a trader they don’t have commercial relations with;
  • the information/documents required for resolving the application have not been supplied;
  • the consumer does not reply within 90 days;
  • the consumer withdraws.

• Other reasons:
  • pending court proceedings;
  • forced execution procedures have already been initiated;
  • traders made several offers, but all of them were turned down by consumers (before approaching ABDRC), and traders maintain their point of view in the initial answer sent to consumers;
  • lack of grounds (claimed by the trader).

BENCHMARKING:

CONCLUSIONS:

The ABDRC services continue to be accessed by increasingly more Romanians who have problems with their banks/NBFIs. Benefits of conciliation: the court proceedings are avoided and the contractual relations between parties continue, the short case settlement time (approximately one month over the last three years), the procedure is free of charge for consumers; and the expertise of conciliators, are all important benefits for both consumers and the financial and banking institutions involved in these negotiations, particularly during economically difficult times (the effects of pervasive rise in prices, due to the war being fought close to the borders of Romania are acutely felt). In this context, the conclusions drawn for the first six months of 2024 are as follows:

• In the first half of 2024, Romanians filed close to 1,900 applications for negotiation with banks and NBFIs. This means 20% more than in the first half of 2023.
• People filed most of the applications to banks, and the share of applications intended to banks (out of the total) went up from 65% to 70% compared to last year.
• The number of negotiation cases (applications accepted by banks) reached 524, going up by 24% compared to H1 2023.
• The increase is even higher for resolutions (+31%). In 444 cases, the consumers came to terms with their banks, after both sides accepted the solution proposed by conciliators.
• The fact that the traders operating in the financial and banking system continued to welcome the amicable (direct) settlement further to a referral to ABDRC is another way of solving the claims raised by consumers, particularly when these claims concern simple matters and do not necessarily require the intervention/expertise of the ABDRC conciliators: 172 such cases/H1 2024 vs 290 such cases at the end of H1 2023.
• The decrease in the number of direct settlements and the increase in the number of cases vs the reference period of 2023 shows that, in the first half of this year, banks preferred to address more issued raised by their customers via ABDRC, rather than inviting them to the bank for a direct settlement. Essentially, it can also be that the issued raised by consumers with their banks via ABDRC are no longer the simplest ones (these are addressed directly in the bank’s office), but are more complex and require the expertise of the Centre’s conciliators.
• In the first half of the year, ABDRC ran a wide-ranging awareness, financial education and communication campaign involving commercial banks and magistrates. The increase in the number of applications filed by consumers can be explained also by the fact, over the recent years, more and more people are finding out about ABDRC’s existence and work from the Centre’s communication and awareness campaigns.
• In the first half of the year, ABDRC produced and broadcasted 7 financial education podcasts featuring top management representatives of commercial banks, ABDRC conciliators and reputable economic journalists (ABDRC’s media partners are prestigious TV channels and online publications).
• In H1 2024, ABDRC profiled the consumer who turned to ABDRC, organised the annual press conference, as well as the conference “Consumer Protection: How to Choose between Alternative Resolution of Disputes and Court Proceedings?”, in partnership with the National Institute of Magistracy (NIM).
• The csalb.ro website has a section dedicated to financial education, where one can find narrative and video information that consumers can rely on to make their financial decisions.
• The informative productions of ABDRC are promoted both on ABDRC’s own channels (website, Facebook, LinkedIn, YouTube, Instagram, and TikTok), and via our media partners (TV channels, radio stations, online media, local press and blogposts).
• Another way of informing consumers is the ABDRC newsletter sent out to consumers of financial services who subscribed to receive this information.
• Via its call-centre, ABDRC contacts consumers who want this (having agreed to this in various social media campaigns) by phone. They receive information about an alternative procedure to settle their disputes with banks/NBFIs.
• ABDRC produces and distributes flyers/leaflets to commercial banks to help consumers better understand the reconciliation process and how an application for negotiation with a bank should be filled out.
• In the first six months of the year, 68 court cases were closed because the underlying disputes had been amicably settled via ABDRC.
  

• In the end of H1 2024, the negotiation procedures involving consumers and banks facilitated by ABDRC resulted into benefits of approx. EUR 1.5 million. Thus, the total amount of the benefits obtained (in all 8 years of operational activity of the Centre) is approximately EUR 12.8 million.
• We will continue efforts to make more popular, and ensure media coverage for, alternative resolution through the courts of law in other counties of the country.

The WEBSITE www.csalb.ro makes available also for legal entities an online tool, which allows for faster and smoother submission of the conciliation applications. On the first page of the website, consumers are prompted to access this application by filling in an application. On average, it takes 7 minutes to fill out the application directly on the website csalb.ro.

The documents entered in the registration form are uploaded into the app, and their processing time is approximately one hour. The application was setup in observance of the principles of the General Data Protection Regulation (GDPR).

The Alternative Banking Dispute Resolution Centre (ABDRC) is an independent non-governmental, apolitical, and not-for-profit legal entity of public interest established under the Government Ordinance no. 38/2015 on alternative resolution of disputes between consumers and traders, which transposes at domestic level Directive 2013/11/EU on alternative dispute resolution for consumer disputes and amending Regulation (EC) no. 2006/2004 and Directive 2009/22/EC.