In the first 9 months, the banks observed the lowest ever percentage of rejected applications, and the highest ever number of direct settlements. Thus, the applications unreasonably rejected accounted for 4.7% of the total applications, whereas the number of direct settlements (after the matter having been first referred to ABDRC) has tripled compared to the similar period of 2021. Thus, during the first three quarters of this year, as many as 823 consumers went through the entire conciliation process (application filing, negotiation, final resolution – a solution accepted by both parties), or reached an amicable settlement directly with banks/NBFIs, having first approached ABDRC. The situation is better than in 2021 (up by 85%) when, during the same period, 445 Romanians were reported in one of these two situations. In the first three quarters of the year, 102 court cases were terminated because the parties wanted, and managed, to find an amicable solution with the help of ABDRC.

Starting with Q1 2020 legal entities can also refer to ABDRC cases related to payment services and electronic money issuing. ABDRC received 7 such applications during the reference period, but the financial institutions these were intended to turned down 6 of them, and only one application became a case and concluded with a resolution.

The number of applications received in Q3 2022 (2,002 applications) stays relatively flat compared to Q3 2021 (1,837 application, i.e. an increase by approximately 10% in the current year). This organic evolution is driven also by both the months of general rises in prices (particularly after the onset of the war very close to Romania), and the evolution of the ROBOR index, which is used to calculate the monthly payable instalments for the floating-interest loans granted before May 2019. Many consumers experience genuine difficulties in making the due payments, and these justified circumstances require identification of solutions to rebalance the contractual obligations (with the applications being submitted directly to creditors, or via ABDRC).

Of the total number of applications received before the end of Q3 2022, 1,306 concerned different issues in relation with banks, whereas 696 concerned different issues in relation with NBFIs.

Thus, compared to the end of Q3 2021, the share of applications concerning NBFIs decreased: from 37.3% of total/2021 down to 34.8% of total/2022.

Additionally, the share of applications intended at banks slightly increased, from 62.7% in Q3 2021 up to 65.2% of total in Q3 2022 (1,152/1,837 in Q3 2021 and 1,306/2,002 in Q3 2022).

In this statistical slot, we need to highlight also that, in the first nine 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 Q3 2022, we see 824 applications for deregistration from the CR (248 intended at banks + 576 intended at NBFIs), while the number of this type of application observed over the entire 2021 was 1,164. 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 casefiles formed at the end of the Q3 2022 reached 506, of which 502 involved banks, and only 4 such casefiles concerned NBFIs (compared to the first nine months of 2021, when 383 casefiles were formed, which means an increase of more than 32% in the current year). Of the casefiles formed this year, 395 concluded with a resolution (the parties accepted the solution proposed by the conciliator), and additional 67 casefiles are still being processed. In 34 cases, at least one of the parties rejected the solution the conciliator rendered 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 395, compared to the similar period of the previous year, when only 302 resolutions were reported (a 30% increase this year).

Furthermore, before the end of Q3 2022, 428 applications were settled amicably by traders after the respective cases had been referred to ABDRC (traders negotiated directly with consumers), broken down as follows: 168 applications settled amicably with banks, and 260 applications settled amicably with NBFIs.

In the end of the Q3 of this year, we counted approximately 2,000 enquiries made by phone, and 280 persons/consumers accessed the chat function on the website of ABDRC.

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

Banks:

• 1,306 compliant applications;
• 243 non-compliant applications;
• 1,230 requests for miscellaneous information.

Classification of the 1,306 compliant applications:

• 502 casefiles formed at the end of Q3 2022 (10 casefiles are formed in 2022 from applications received at the end of 2021);
• 77 applications in the screening phase – documents are being reviewed;
• 168 applications were settled amicably by the parties, but this after the consumer having first referred the case to ABDRC;
• 569 cases were closed.

Classification of the 502 casefiles in the procedure with proposed solution/conciliation:

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

Means of submitting compliant applications:

• 730 were submitted via the app (website);
• 505 were emailed;
• 27 were mailed;
• 44 were brought to, and registered by consumers with, the office of ABDRC.

NBFIs:

• 696 compliant applications.

Classification of the 696 compliant applications:

• 4 cases formed at the end of Q3 2022;
• 69 applications in the screening phase – documents are being reviewed;
• 260 applications were settled amicably between the NBFI and the consumers concerned, however after the consumer having first approached ABDRC;
• 363 were closed – rejected by the NBFIs.

Qualification of the 4 cases in the procedure with proposed solution/conciliation:

• 2 resolutions rendered – the parties reached an agreement;
• 1 case in the phase of discussions with the parties;
• 1 casefile in which one of the parties withdrew.

Means of submitting compliant applications:

• 609 were submitted via the app (website);
• 68 were filed by email;
• 2 were mailed;
• 17 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);
  • 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;
  • Banking fraud.

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;
  • 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 in Q3 2022 observed a slight increase (approximately 10%) compared to Q3 2021. If we are to relate to the cases solved (with resolutions or with amicable settlement further to a referral to ABDRC), the results at the end of Q3 of this year are 85% better than in the same period of last year, with increase in both the number of cases formed, and the number of direct amicable settlements between the parties (having first approached ABDRC). This increase is driven including by the number of cases effectively solved and concluded with a resolution/the parties reaching an agreement (as an effect of the increased willingness of the parties to negotiate).

CONCLUSIONS:

The ABDRC services continue to be accessed by the Romanians who have problems with banks/NBFIs. The benefits of conciliation: the court proceedings are avoided and the contractual relations between parties continue, the short case settlement time (time average of 33 days/case in 2021), 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 the pandemic, the general price rises and the war fought very close to Romania are acutely felt). In this context, the conclusions drawn for the first nine months of 2022 are as follows:

• As many as 2,002 consumers 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 2021, consumers filed approximately 10% more applications (2,002 applications at the end of Q3 2022 v 1,837 applications at the end of Q3 2021);
• In the first 9 months, the banks observed the lowest ever percentage of rejected applications, and the highest ever number of direct settlements. Thus, the applications unreasonably rejected accounted for 4.7% of the total applications. Further to the requests made by ABDRC with banks, concerning applications that had been initially rejected, the banks reconsidered their initial opinion and accepted them for negotiation;
  • 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: 428 such cases/Q3 2022 v 143 such cases at the end of Q3 2021 (a triple figure compared to the previous year);
  • The number of casefiles formed in the first nine months of this year it is growing noticeably compared to Q3 2021: 506 cases/Q3 2022 v 383 cases/Q3 2021 (an increase of approximately 32%);
  • This year, the website csalb.ro offers a section dedicated to financial education, and ABDRC’s communication with consumers of financial services focused in 2022 on this particular matter, which has become highly important in the context of these unpredictable economic and social developments;
  • In the first nine months of the year, 102 court cases were closed because the underlying disputes had been amicably settled via ABDRC, compared to the 67 such cases reported for the entire 2021. Of these 102 cases, 95 have already been settled by resolution (the parties have reconciled), and seven are in progress;
  • In July, ABDRC asked the High Court of Cassation and Justice and the 15 Courts of Appeal across the county to provide their judges with information about the possibility for consumers to have their disputes with banks/NBFIs settled amicably. Moreover, judges may recommend the parties to have their issues settled amicably via ABDRC. Basically, ABDRC wanted the judges to apply the provisions of Article 21(2) of the Code of Civil Proceedings reading that: “Throughout the proceedings, the judge shall attempt to reconcile the parties, providing them with the necessary guidance, according to the law”. Ideally, this recommendation should be made at the start of the proceedings,e. before the first court hearing. But this peace-making avenue can be walked also by any of the parties, at any time during the proceedings.
  • In the end of Q3 2022, the negotiation procedures involving consumers and banks facilitated by ABDRC resulted into benefits in excess of EUR 1.5 million (approximately 80% of the total amount of the benefits obtained from negotiations in all 2021). Thus, the total amount of the benefits obtained (in the more than 6 years of operational activity of the Centre) is EUR 7.5 million.
  • 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 92% (for the applications resolve in Q3 2022). Slowly, but steadily, the amicable dispute resolution has mainstreamed on the Romanian financial and banking market, with increasingly more actors embracing it: by both banks and some NBFIs, as well as by many consumers, as both parties have realized the benefits of amicable resolution.

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.