The statistical data shows that the number of consumers who approached ABDRC remained relatively flat v the same period of 2020 (the period Q1-Q3 2020 overlapped the peak of the pandemic and this brought weeks with record application numbers in excess of 100). If we are to related to the cases concluded with resolutions, the results in the end of the period Q1-Q3 of this are 32% better than the same period of last year, and are going slightly up in terms of both the number of applications received and the number of conciliation casefiles formed. However, this increase is driven by the number of cases effectively resolved and concluded with a resolution/the parties reaching an agreement (thanks to the higher processing speed and the increased willingness of the parties to negotiate).

In the end of the period Q1-Q3 2021, as many as 445 consumers went through the entire conciliation process (application filing, negotiation, final resolution accepted by both parties), or reached an amicable settlement directly with banks/NBFIs, having first approached ABDRC.

Compared to the same period of last year (Q1-Q3 2020), we have noticed an increase in the number of cases concluded by resolution (successful negotiations assisted by the Centre’s conciliators): in fact, from 228 resolutions observed in the end of Q3 2020, we have reached 302 resolutions in the first three quarters of 2021 (an increased by 32% of this indicator).

Starting with Q1 2020, legal entities can also refer to ABDRC cases related to payment services and electronic money issuing. ABDRC has already received five such applications so far, but the financial institutions involved, which could have entered negotiations thereon, rejected them.

The number of applications recorded in the period Q1-Q3 2021 (1,837 applications) accounts for approximately 74% of the total of 2020 (meaning three quarters of last year’s total). This flat development is due to the months that continued to be affected by the sanitary crisis. Many consumers became or continue to become unemployed/furloughed, or their work was suspended, which could led them into applying for either the statutory moratoria (in the first part of this year), or identification of a solution to rebalance their contractual obligations (their applications having been submitted directly to creditors, or via ABDRC).

Thus, while last year/2020, ABDRC used to receive in average 48 negotiation applications per week (this, considering that in March 2020 ABDRC used to receive in average more than 86 applications per week), by the end of Q3 2021, we received, in average, 47 negotiation applications per week.

Of the total number of applications received by the end of the Q3 2021, 1,152 concerned different issues in relations with banks, whereas 685 concerned different issues in relations with NBFIs.

In the same context, the period Q1-Q3 2021 saw an increase in the number of applications intended for NBFIs, with their share (of the total number of applications submitted to ABDRC) being increasingly higher. Thus, the end of Q3 2020 saw a share of applications intended for NBFIs of 24% of the total (about one quarter); in the end of the same period of 2021, the share of applications intended for NBFIs is 37% of the total (more than one third of the total).

Per a contrario, the number of applications intended for banks decreased in the first 3 quarters of this year v Q1-Q3 2020: thus, from 1,557 applications during the reference period of 2020 (76% of the total number of applications) down to 1,152 applications/Q1-Q3 2021 (63% of the total number of applications), equivalent to a drop of 26% (compared to the same period of last year).

In this statistical slot, we need to highlight also that the applications concerning from the Credit Office observed a significant increase, with 888 such applications recorded in the end of Q3 (254 concerning banks + 634 concerning NBFIs). In mid-2021, there were 584 applications for deregistration from CO (194 intended for banks + 390 intended for NBFIs), already overtaking the figure of the entire 2020 (530 such applications).

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, if no room at all for negotiation.

The total number of casefiles formed in the end of Q3 2021 reached 383, of which 378 involved banks, and only 5 such casefiles concerned NBFIs. Of the casefiles formed this year, 302 concluded with a resolution (the parties accepted the solution proposed by the conciliator), and additional 41 casefiles are still being processed (in the end of Q3 2021). In 38 cases, the parties rejected the solution the conciliator rendered and a report was issued.

Even if the number of casefiles formed by the end of Q3 2021 is lower compared to the same period of last year (when the pandemic was at its peak), we notice an increase in the number effectively resolved (thanks to the higher processing speed) and concluded with a resolution (that of parties reaching an agreement). Thus, in the end of Q3 2021, we speak of 340 cases settled (of the 383 formed so far), of which 302 concluded with resolutions and 38 concluded with reports, equivalent to a settlement rate of approximately 90%, which means that only 10% of the total cases of 2021 were still being processed. This development mirrors a higher willingness of the parties to negotiate, as well as the speeding-up of the actual negotiation process managed by the ABDRC conciliators.

Furthermore, before the end of the Q3 2021, 143 applications were settled amicably by traders after the respective cases having been referred to ABDRC (traders negotiated directly with consumers), broken down as follows: 122 applications settled amicably with banks, and 21 applications settled amicably with NBFIs. During the same period of last year, as many as 259 applications were settled directly. The decrease observed this year is, on the one hand, the effect of the moratoria seen early this year (consumers approached the banks directly and there was no need for the application to pass by ABDRC) and, on the other hand, shows a bigger appetite for conciliation instead of direct settlement (such a direct settlement does not involve a conciliator).

In the end of the Q3 of this year, we counted approximately 2,900 enquiries made by phone, and 500 persons/consumers access the chat function on the website of ABDRC.

The break-down of applications on banks/NBFIs is as follows:

Banks:

• 1,152 compliant applications;
• 170 non-compliant applications;
• 1,000 requests for miscellaneous information.

Classification of the 1,152 compliant applications:

• 378 casefiles formed in the end of Q3 2021 (14 casefiles are formed/2021 from applications received in late 2020);
• 65 applications in the screening phase – documents are being reviewed;
• 122 applications were settled amicably by the parties, but this after the consumer having first referred the case to ABDRC (of which, 51 concerned deregistration of entries from the Credit Register);
• 601 applications were closed (of which, 203 concerned deregistration of entries from the Credit Register).

Classification of the 378 casefiles in the procedure with proposed solution/conciliation:

• 302 resolutions rendered – the parties reached an agreement;
• 22 cases in the phase of discussions with the parties;
• 15 preliminary case;
• 2 cases – withdrawal of a party from the procedure;
• 37 reports – the parties failed to reach an agreement.

Means of filing compliant applications:

• 711 were submitted via the app (website);
• 374 were emailed;
• 34 were mailed;
• 33 were brought to, and registered by consumers with the office of ABDRC.

NBFIs:

• 685 compliant applications.

Classification of the 685 compliant applications:

• 5 cases formed in the end of Q3 2021;
• 116 in screening phase – documents are being reviewed;
• 21 applications were settled amicably between the NBFI and the consumer, but this after the consumer having first referred the case to ABDRC (of which, 13 concerned deregistration of entries from the Credit Register);
• 543 applications were closed – refused by NBFIs (of which, 506 concerned deregistration of entries from the Credit Register).

Qualification of the 5 case in the procedure with proposed solution/conciliation:

• 3 cases in the phase of discussions with the parties;
• 1 preliminary case
• 1 report – the parties failed to reach an agreement.

Means of filing compliant applications:

• 601 were submitted via the app (website);
• 72 were filed by email;
• 9 were mailed;
• 3 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);
  • 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);
  • Finding a solution to address the problems generated by the pandemic;
  • 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, statement of account, etc.);
  • Refunds of garnished amounts;
  • Mortgage deregistration;
  • Stay of instalment payment (pursuant to the Government Emergency Ordinance no. 37/2020).

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;
  • the consumer does not meet the terms of the Government Emergency Ordinance no. 37/2020.

• 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;
  • there is no insurance;
  • 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).

NOTE:

The statistical data shows that the number of consumers who approached ABDRC remained relatively flat v the same period of 2020 (the period Q1-Q3 2020 overlapped the peak of the pandemic and this brought weeks with record application numbers in excess of 100). If we are to related to the cases concluded with resolutions, the results in the end of the period Q1-Q3 of this are 32% better than the same period of last year, and are going slightly up in terms of both the number of applications received and the number of conciliation casefiles formed. However, this increase is driven by the number of cases effectively resolved and concluded with a resolution/the parties reaching an agreement (thanks to the higher processing speed and the increased willingness of the parties to negotiate).

Statistical information about the Q3 of 2021:

CONCLUSIONS:

The ABDRC services continue to be accessed by the Romanians who have problems with banks/NBFIs. The benefits of conciliation: the court proceedings avoided and the continued contractual relations between parties, the short case settlement time (less than 90 days), the procedure is free of charge for consumers, and the expertise of conciliators are important benefits for both consumers and the financial and banking institutions involved in these negotiations, particularly during economically difficult times (the effects of the pandemic continue to be felt). In this context, the conclusions drawn for the first nine months of 2021 are as follows:

• As many as 1,837 Romanians have approached the Alternative Banking Dispute Settlement Centre (ABDRC) in the first nine months of this year to find amicable solutions in their relations with banks and NBFIs. Compared to the first nine months of 2020, consumers filed approximately 90% of the number of applications (2,048 applications in the end of Q3 2020 v 1,837 applications in the end of Q3 2021, but 74% (three quarters) of this statistical benchmark/the entire last year).
  • The number of casefiles formed has gone down by approximately 10% v the same period of 2020, possibly due to the effects of the Government Emergency Ordinance no. 37/2020 (the scope of which was extended to cover also for the first half of this year). And this because this piece of legislation requires that the payment deferral applications should be filed directly to banks, and many consumers pursued this avenue to have payment of their instalments deferred/suspended. Nevertheless, we need to point out that Q3 2021 saw the highest number of cases compared to the other quarters of this year (Q1 – 130; Q2 – 112; Q3 – 141).
  • The fact that the traders operating in the financial and banking systems continued to welcome the amicable (direct) settlement further to a referral to ABDRC is another way of addressing the applications filed by consumers, particularly when these applications concern simple matters and do not necessarily require the intervention/expertise of the ABDRC conciliators (143 such cases in the end of Q3 2021).
  • During the first nine months of 2021, more banks publicly voiced/reiterated their public support to the conciliation procedure, and urged their clients to approach ABDRC when they experience difficulties in repaying loans, or have other problems with the services and products offered by banks/NBFIs. The top management representatives of BCR, BRD, Banca Transilvania, ING, Raiffeisen and CEC Bank have all made themselves available to negotiate with consumers via ABDRC.
  • In the end of Q3 2021, the negotiation procedures involving consumers and banks managed by ABDRC resulted into benefits in excess of EUR 1.240 million (approximately 93% of the total amount of the benefits obtained from negotiations in all 2020). Thus, the total amount of the benefits obtained (in all 5 years of operational activity of the Centre) is approximately EUR 5.25 million.

• During the first nine months of the year, ABDRC continued its activity in observance of the sanitary conditions imposed by the authorities (with a view to controlling/mitigating the effects of the pandemic). Thus, than 90% of the Centre’s work was rendered online, and conciliators continued to remotely facilitate the negotiations between consumers and banks/NBFIs (via email and over the phone). Additionally, the IT tool (which went live in July 2018, and is used to manage the applications and casefiles directly on the ABDRC website) proved its efficiency during this time when the Centre was able to continue to smoothly manage the relation between consumers and traders, relying on the conciliators’ expertise.
• The developments of the past years point to a significant decrease in the number of applications rejected by banks of those received by ABDRC (rejected applications/applications that were not turned into cases): from 80% in 2016 down to 45% in 2018, and to 28% in 2020. During the first nine months of 2021, the share of applications which were unreasonably closed by banks dropped down to 17%, and the recommendation that ABDRC makes to both banks and NBFIs is to strive to keep this percentage below 20% by the end of the year. This is an actionable objective, so much the more that there are already large banks the rejection rate of which ranges has already dropped below 10%, or even below 5%.
• This year we see more willingness of consumers and banks to negotiated and make compromises in order to maintain their contractual relations. Beside the increasing number of conciliations between banks and consumers compared to last year, we have also witness discontinuation of court cases or datio in solutum proceedings precisely for the parties to find an amicable solution via ABDRC. Moreover, there have been conciliations also when the disputes between the parties were already in forced execution stage.
• The share of cases concluded with a resolution further to negotiations (in which the parties accepted the solution proposed by the conciliator) is at approximately 90% (for the applications resolve in the period Q1-Q3 2021). The statistics have shown that this mechanism is both valid and useful, despite the lack of trust inherent to any beginning that had to be addressed in the first years.
• As of Q1 2020, ABDRC can also address conciliation applications received from legal entities related to payment services and electronic money issuing. While only few such applications have been received by ABDRC, these were not accepted by their recipient financial institutions.

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. 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.