The ABDRC services continue to be accessed by the Romanian consumers, the number of applications recorded in 2023 exceeding the figure of 2022 (2,932 applications filed v a total of 2,627 applications in 2022; the weekly average is higher in 2023, with 56 applications/week as compared to 50 applications/week in 2022).

I.  About ABDRC Establishment

1. The Alternative Banking Dispute Resolution Centre (ABDRC) is an independent non-governmental apolitical, 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 No 2013/11/EU on alternative dispute resolution (ADR) for consumer disputes, as well as Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution (ODR) for consumer disputes.

2. ABDRC’s work is render at two levels:

• administrative – organization and functioning of ABDRC as legal entity;
• operational – organization and performance of the alternative dispute resolution activity.

II. Administrative activity of ABDRC

1. Activity of the Steering Board

The ultimate duty of the Board, the work of which is rendered under the Regulation for ABDRC’s Organization and Steering Board’s Functioning, is to steer and provide oversight of the administrative activity of the Centre. Thus, the members of the Steering Board have powers and duties in connection with approval and amendment of the resolution procedures, approval of conciliators, approval of the income and expenditure budget, etc.

The Board members are not involved in any operational activity of the Centre (the review and resolution of the disputes being reserved exclusively to conciliators), and their task is to see that ABDRC has available sufficient resources to carry out its activity in an efficient and independent manner.

Highlights of the Steering Board’s activity in 2023:

• continuation of all the activities (conciliation, meetings of the Steering Board in physical format or via email, communication, employees’ presence in the office, meetings with traders/collaborators, etc.);
• continuation of the communication activity via different channels adapted to the ABDRC’s purpose/mission, as well as ensuring the necessary conditions for the development/expansion of this activity also on social media channels: Facebook, Instagram, YouTube, LinkedIn, TikTok;
• continuation of the administrative litigation proceedings registered with Bucharest Court of Appeal under case number: 6047/2/2018, concerning the challenge of ABDRC against the Decision no. 2377/DA/31.05.2018 issued by the Ministry of Economy on entering ABDRC in the list of ADR entities in Romania – the proceedings are pending before this court, and the court has ruled on the merits (after 4 years and 3 months, on 11 November 2022 à the administrative action was rejected. The judgment with reasoning was served on 17 October 2023, and ABDRC lodged an appeal on 31 October 2023);
• approval of the financial statements executed as at 31 December 2022, and provision of information about the 2022 Audit Report;
• election of the President of the Steering Board for a 1-year term of office.

2.  Communication, promotion, information and financial education by ABDRC

Communication takes place across the following levels (according to ABDRC’s communication strategy):

• communication with banks and NBFIs (traders);
• communication with consumers;
• communication with the media;
• communication with stakeholders;
• communication with conciliators;
• holding of work meetings with conciliators, whenever these are necessary, as part of the process of updating/reviewing the Regulation of the Procedural Secretariat and the ADR procedures, as the amicable dispute resolution work advances;
• organizing working meetings with representatives of commercial banks (bilateral meetings) to improve the activity of alternative dispute resolution.

2.1. ABDRC’s Communication and Promotion Activity

Communication with, and information of consumers and traders about ABDRC take place via the following channels:

• communication via the traditional media channels (TV, Radio, Written Press, Online, Blogging);
• communication on alternative channels (street banners);
• communication via own channels: Website, Facebook, LinkedIn, YouTube, Instagram, Tik-Tok;
• organization of/participation in conferences, workshops, debates (also online), etc.;
• communication via commercial banks (online and offline: leaflets, posters, stickers, video production);
• communication via the National Authority for Consumer Protection (through the County Commissariats);
• communication via consumer associations.

2.2. Information and financial education

Consumer information about ABDRC and their financial education is performed via the following channels:

• Communication via the traditional media channels (TV, Radio, Written Press, Online) by campaigning the work of ABDRC, the cases resolved and the benefits of conciliation in news, talk-shows, financial education media projects, public awareness campaigns, etc.;
• Communication via own channels: Website, Facebook, YouTube, LinkedIn, Instagram, Tik-Tok;
• Creation of a financial education section on the csalb.ro website;
• Sending out 23 newsletters to more than 500 subscribers;
• Call-centre operators (outbound) calling more than 1,000 consumers who had agreed to be contacted after the Facebook lead generation campaigns;
• Running together with the social media agency Marketiu a campaign to promote financial education messages on the YouTube, Facebook, Instagram, LinkedIn and Tik-Tok channels;
• Communication to the press through press releases and media campaigns in the local press, online and in collaboration with various media entities;
• Participation in financial education projects with institutions, such as the National Bank of Romania, the Academy of Economic Studies, independent bodies (Sută la Sută Românesc – Tribuna Consumatorilor Association), and with media institutions (România TV, Profit News TV, Bursa, Radio France International, Hotnews, Profit.ro, Banking News, Juridice.ro, Universul juridic, Bancherul, Finzoom.ro, Piața Financiară, Club antreprenor, and Spotmedia);
• Call-centre activity, reporting, regular training, operation of the ABDRC website chat, message adaptation;
• Organization of/participation in conferences, workshops, webinars, etc. (face-to-face and online);
• Financial education through the ABDRC conciliators: press coverage to promote the work of the Centre further to issuing of press releases;
• Videos (distributed in the media and on ABDRC’s own channels) where journalists, presidents and vice-presidents of commercial banks, and representatives of the National Bank of Romania, the Romanian Association of Banks and ABDRC advise consumers on financial education topics;
• Provision of information via commercial banks:
• press-releases involving financial and banking institutions;
• participation of bank representatives in interviews and video productions;
• promotion of the representatives of commercial bank and the Romanian Association of Banks in media campaigns, stand-alone communication projects and online, whereby consumers are urged to pursue conciliation;
• Distribution of 100,000 information flyers about ABDRC’s work to banks.
• Provision of information via courts of law
• Press releases involving court presidents and judges (from the County of Arges);
• Submission and distribution of ABDRC information flyers in courts of law (from the County of Arges).
• Provision of information via the National Consumer Protection Authority (ANPC) (via certain county commissariats) and the consumer protection associations.

3.  Other administrative activities

3.1. Ensuring observance by the Centre of the personal data protection rules

ABDRC has put in place a number of technical and organizational measures to protect natural persons in terms of personal data processing (as early as 2018, when Regulation No 679/2016 came into force):

• internal and external work procedures acknowledged by employees and collaborators;
• ensuring adequate security for the data and information of any kind held by ABDRC, as well as compliance with the backup and disaster recovery requirements by putting in place the necessary systems (Antivirus, SOC – Security Operations Centre, DLP – Data Loss Prevention etc.);
• a VPN solution with a view to keeping secure the work equipment and materials for each employee and collaborator of ABDRC (via connection to the secured Internet network of the Centre), for work-from-home cases;
• compliance by employees/collaborators with the data protection requirements is regularly reviewed.

3.2. Call-Centre

• The call-centre is used also to collect several categories of information about the subject-matter of the consumers’ enquiries, and/or about the sources they found about the Centre from. à This data is used including in our communication actions by narrowing-down the scope of the promotion efforts to the most relevant/efficient means of conveying information about the availability and services of ABDRC.

III. Operational activity of ABDRC

The operational activity of ABDRC is detailed in the Annex which is an integral part of this document.

IV. Conclusions

The ABDRC services continue to be accessed by the Romanian consumers, the number of applications recorded in 2023 exceeding the figure of 2022 (2,932 applications filed v a total of 2,627 applications in 2022; the weekly average is higher in 2023, with 56 applications/week as compared to 50 applications/week in 2022).

Benefits of conciliation:

• avoidance of court proceedings, and continuation of the contractual relations between the parties;
• short case settlement time (less than 90 days);
• no charges for consumers, and
• expertise of conciliators (the members of the Body of Conciliators are individuals with at least 10 years of expertise in the financial and banking area, and are well known for their professional and educational background and reputation);

are strong arguments for both the consumers, and the financial and banking institutions involved in these negotiations, particularly during such economically difficult times as we have gone through over the last 4 years (2020 – 2023) and we still expect to face in 2024, too.

In this context, the following are key findings about the first 8 years of operation:

• taking further the activities aimed at raising awareness of consumers, in particular with the support of traders, about of the benefits of accessing the services provided by ABDRC;
• the need to determine/convince consumers and traders to opt for (negotiation-based) alternative dispute resolution methods, avoiding the contentious way, in court proceedings, and, additionally, redirecting some of the disputes currently pending before courts towards ABDRC to be settled amicably, through conciliation (in years 2021-2023, 502 cases/casefiles pending before the courts of law were settled with the aid of ABDRC conciliators, at the initiatives of either the banks or the consumers involved in these proceedings);
• the need to determine and put in place systematic/concerted communication techniques to promote the Centre and capture the interest of consumers, and create a fostering environment among consumers;
• the NBFIs need to become more open to entering the conciliation procedure, and both the banks and the NBFIs should reduce their number of applications unreasonably closed;
• a key finding from work of the Centre so far is that both parties have a good appetite for the procedure with proposed solution/conciliation, to the detriment of the procedure with enforced solution/arbitration (to date, no case has been ever settled pursuing the procedure with enforced solution/arbitration);
• as of Q1 2020, ABDRC can also address conciliation applications received from legal entities related to payment services and issuing of electronic money; it has been proven that legal entities are off to a more difficult start of conciliation because corporate bank customers have filed such applications before, but, with one exception, traders refuses to embark in such procedures;
• ABDRC has proven an extraordinary capacity to adapt its work to the requirements of online work, as follows: approximately 96% 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 was completely rewritten in Power Automate in 2023, with the new version going live on 10 October 2023) which is used to manage the applications and casefiles directly on the ABDRC website, has proven its efficiency during the entire time when the Centre intermediated continues to smoothly intermediate the relation between consumers and traders;
• the support of the competent authority (currently, this is the Ministry of Energy) is required to achieve cross-border cooperation and registration of ABDRC on the European online platform (ODR – Online Dispute Resolution) and with FIN-NET.

In 2023, ABDRC made a number of recommendations to banks (as early as late Q1 2023):

1. The consumer applications referred by ABDRC to banks should be reviewed by the credit institution with the amount of flexibility required for the parties to reach an agreement. Essentially, the aim is to decrease, and keep, the number/share of closed application below 10%.

Am important share of the closed applications were rejected for valid reasons. For instance, in 2023, there were 1,234 applications concerning deregistration from the Credit Register: 395 applications in relation to banks (representing 21% of the total applications intended to banks) + 839 requests in relation to NBFIs (representing 80% of all applications intended to NBFIs). It should be recalled that most of the applications concerning the Credit Office, the First House programme or assigned loans are rejected 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.

2. Our recommendation was to try to increase the number of applications turned into cases given also the following:
   • consideration will be given to the possibility of putting an end to the current court proceedings further to settlement of an application via ABDRC, as well as to the possibility of identifying customers with potential problems and guiding them towards ABDRC (thus avoiding courts cases as the problems concerned are addressed under the cases formed and settled via the Centre);
   • the applications entering the restructuring or forced execution flows may also be settled/negotiated via ABDRC;
   • when an application is initially closed, but a solution is later found for the consumer, the trader may inform the client thereof and recommend them to fila a new application with ABDRC (unless the claims therein can be addressed directly, through direct amicable settlement between the parties).

3. The mandates granted by banks are recommended to include value caps that are different from/higher than those set out in the commercial offers of the respective banks’ portfolio, thus proving the usefulness and benefits of settlement via ABDRC, further to the consumer rejecting the bank’s initial offer (in the amicable settlement attempt).

4. The banks are recommended to consider from the very beginning the amicable settlement of low complexity cases that would otherwise end up with ABDRC, in case of a refusal by the consumer.

5. Considering the widening of ABDRC’s powers to cover also for legal entities, banks are recommended accept also cases that involve this category of customers.

Final conclusions

• Over its 8 years of operation, ABDRC has proven that this new paradigm – an alternative way of resolving disputes – is a win-win approach for both consumers and traders. The possibility that both parties can be involved in changing certain given characteristics of a contractual framework is the starting point for a shift of mindset about the banking contracts/services, at the level of society;

• Thus, parties can understand one another and forge a mutual-trust relationship, this being one of the key benefits brought along by the ADR procedures in time, and the facts and figures stand proof thereof: since its establishment, 3,272 cases concluded with the parties coming to terms with the aid and facilitation of one of ABDRC’s conciliators. To this add another 091 amicable settlements between the parties, after consumers having firsts referred the matter to the Banking ADR Centre;

• Conciliation via ABDRC should become the alternative of choice for a consumer when they need to address a problem with the traders in the financial and banking system, to the detriment of the actions brought before courts or other litigation-based methods;

• Consumers are encouraged to keep an open mind to building a trust-based relationship with the bank, considering that the problems reported by consumers are understood and accepted by the bank when they are objective/justified and reasonable. Also, the fine-tuning of the conciliation mechanisms, added to the banks’ willingness to adopt a flexible attitude to the requests received from customers can help constantly and significantly increase the number of successful applications with contributions from all parties.
• There is a need for more visibility in advancing the possibility that the Centre addresses also disputes that involve legal entities (on matters concerning payments and issuing of electronic money), with a view to improving the business environment and the mutual trust between the providers of such services and companies or public institutions: the first and only negotiation between a company and a bank concluded with the parties reaching an agreement (this concerned a payment operation) in 2022.
• In 2023, 290 court cases were discontinued because the parties wanted and managed to find an amicable solution in ABDRC. This is an important (double) increase compared to the 145 such cases we recorded in the entire 2021 and the 67 in 2022. In July 2022, ABDRC asked the High Court of Cassation and Justice and the 15 Courts of Appeal across the county to provide their judges with information, and that these recommended the amicable settlement of the disputes between consumers and banks/NBFIs. In 2023, conciliation started to be promoted in the courts of law of Arges, and ABDRC continues to employ efforts to make more popular, and ensure media coverage for, the alternative resolution through the courts of law of other counties of the country.
• Public opinion was and continues to be polled – opinion polls carried out by ABDRC in 2022 and 2023 with Finzoom.ro and CURS – and their results provide an x-raying of topics of interest and hot topics for the general public and for the banking system and underpinned the press releases and information released in different media;
• The constant involvement of all stakeholders (the National Bank of Romania, the Romanian Association of Banks, the consumer protection associations) will help a constant and important development in time of this type of settlement, as well as build a trust-based relationship between consumers and banks/NBFIs.

V. ANNEX

REPORT

on the operational activity of

ALTERNATIVE DISPUTE RESOLUTION

as at 31 December 2023

The Alternative Banking Dispute Resolution Centre started its alternative dispute resolution operational activity on 1 March 2016.

In 2023, 4,607 written applications and 2,157 phone calls were received from consumers, and 2,932 of the written applications were found compliant, 367 were incompliant, and 1.308 were requests for information. Distribution of the complete casefiles to conciliators is done randomly, depending of the availability and workload of each conciliator.

Consumers used the following means to submit their applications (for the 2,932 compliant applications): 1,885 compliant applications concerning banks (filed by consumers/individuals) + 1.047 compliant applications concerning NBFIs.

For Banks:

Individuals:

• 1,007 were submitted online, via the ABDRC website;
• 786 were e-mailed;
• 62 were brought to, and registered personally by consumers with, the office of ABDRC;
• 24 were mailed.

Legal Entities:

• 5 were submitted online, via the ABDRC website;
• 1 request received by email;

For NBFIs:

• 931 were submitted online, via the ABDRC website;
• 111 were e-mailed;
• 4 were brought to, and registered by consumers with, the office of ABDRC.
• 1 was mailed.

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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, statement of account, etc.);
• Refunds of garnished amounts;
• Mortgage deregistration;
• Fraud committed via bank channels.

The main reason for closing applications is the refusal of traders to have the dispute settle via the ADR procedure, and the closing reasons can fall into a number of 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).

Qualification of the 2,932 compliant applications:

For banks (of the 1,885 compliant applications recorded):

• 754 turned into cases (7 cases from applications submitted at the end of 2022);  
• 83 in screening phase;
• 204 settled amicably after a referral to ABDRC + adjoined;
• 851 closed.

For NBFIs (of the 1,047 compliant applications recorded):

• 4 turned into cases (1 case from applications submitted at the end of 2022);
• 91 in screening phase;
• 361 settled amicably after referral to ABDRC;
• 592 closed.

A total of 174 applications (83 concerning banks and 91 concerning NBFIs) are in screening phase (documentation is reviewed for completeness, and information and supporting documents are requested).

Qualification of the 754 cases undergoing the procedure with proposed solution (as at 31 December 2023):

For banks:

• 9 preliminary cases;
• 23 cases in the phase of discussions with the parties;
• 657 resolutions;
• 57 reports;
• 8 cases where one of the parties withdrew from the procedure;

Qualification of the 4 cases undergoing the procedure with proposed solution (as at 31 December 2023):

For NBFIs:

• 0 cases in the phase of discussions with the parties;
• 4 resolutions;
• 0 preliminary cases;
• 0 reports.

At the end of 2023, the negotiation procedures involving consumers and banks facilitated by ABDRC resulted into benefits in excess of approx. EUR 3,3 million. Thus, the total amount of the benefits obtained (in all 8 years of operational activity of the Centre) is approx. EUR 11.3 million;

The WEBSITE www.csalb.ro provides information about:

• Regulation for organization of the Alternative Banking Dispute Resolution Centre and for functioning of the Steering Board;
• Procedural Rules regarding:
  • ADR procedure concluded with proposal of a solution;
  • ADR procedure concluded with enforcement of a solution;
  • ADR procedure concluded with proposal of a solution for legal entities;
  • ADR Procedure concluded with enforcement of a solution for legal entities;
• Steering Board;
• List of Conciliators;
• Short contact number: 021 9414, available every day between 09:00 AM – 06:00 PM;
• Press releases and media coverage;
• Miscellaneous useful information for consumers and traders.