The interest of consumers in ABDRC has raised compared to last year (even under the current pandemic conditions). The figures for the end of Q1 this year, compared to those of the same period of last year, are approximately 20% better in terms of the number of applications received. If we are to look into the cases addressed (under resolutions, or by amicable settlement after an initial referral to ABDRC), the situation is similar to that of last year. Q1 2021 enjoys a monthly average better the average of 2020, in respect of the number of applications, and better than the average of Q1 2020 in respect of the number of amicable settlements between the parties, after an initial referral to ABDRC. At the end of Q1 2021, the share of cases concluded with a resolution further to negotiations (in which the parties accepted the solution proposed by the conciliator) is 94% vs. 6% closures (cases when the parties did not reconcile).
REPORT ON THE ALTERNATIVE DISPUTE RESOLUTION ACTIVITY AS AT 31.03.2021
- Apr 21, 2021
- In ABDRC reports
During the first three months of 2021, as many as 136 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.
Furthermore, as of Q1 2020, legal entities can also refer to ABDRC cases related to payment services and electronic money issuing. The banks for whom such requests were received did not accept the settlement of the disputes within the ABDRC yet.
Close to 650 Romanians have approached the Alternative Banking Dispute Settlement Centre (ABDRC) in the first three months of this year to find amicable solutions in their relations with banks and NBFIs. Compared to the same period of 2020, the number of applications increased by approximately 20%.
Of the total number of applications received in Q1 2021, 440 concerned different issues in relations with banks, whereas 204 concerned different issues in consumer relations with NBFIs.
The total number of casefiles formed in Q1 2021 reached 130, of which 127 involved banks, and only 3 such casefiles concerned NBFIs. Of these casefiles, 82 concluded with a resolution (the parties accepted the solution proposed by the conciliator), and an additional 44 casefiles are in progress. In 4 cases, the parties rejected the solution the conciliator rendered and a report was issued. As compared to the same period of last year, the number of casefiles formed has decreased by 15%.
Furthermore, 54 applications were settled amicably by traders after the respective cases having been first referred to ABDRC (traders negotiated directly with consumers), broken down as follows: 39 applications settled amicably with banks, and 15 applications settled amicably with NBFIs. The number of amicable settlements increased as compared to the reference period of last year by approximately 23%.
In March 2021, the Alternative Banking Dispute Resolution Centre celebrated its fifth anniversary of operational activity.
At the end of the first quarter of this year, we counted approximately 1,130 requests made by phone.
The break-down of applications on banks/NBFIs is as follows:
- 440 compliant applications;
- 30 non-compliant applications;
- 405 requests for miscellaneous information.
Classification of the 440 compliant applications:
- 127 casefiles created in Q1 2021;
- 70 applications in the screening phase – documents are being reviewed;
- 39 applications were settled amicably by the parties, but this after the consumer having first referred the case to ABDRC;
- 218 cases were closed.
Classification of the 127 casefiles in the procedure with proposed solution:
- 82 resolutions rendered – the parties reached an agreement;
- 38 cases in the phase of discussions with the parties;
- 4 reports – the parties failed to reach an agreement;
- 3 preliminary casefiles;
- 0 casefiles in which one party withdrew from the procedure.
Means of filing compliant applications:
- 301 were submitted via the app (website) ó 69%;
- 116 were emailed ó 26%;
- 9 were mailed ó 2%;
- 14 were brought to, and registered by consumers with the office of ABDRC ó 3%.
- 204 compliant applications;
Classification of the 204 compliant applications:
- 3 casefiles created in Q1 2021;
- 76 applications in the screening phase – documents are being reviewed;
- 15 applications were settled amicably between the NBFI and the consumer concerned, however after the having first consumer approached ABDRC;
- 110 were closed – rejected by the NBFIs;
Qualification of the 3 casefiles in the procedure with proposed solution:
- 2 cases in the phase of discussions with the parties;
- 1 preliminary casefile;
- 0 resolutions rendered;
- 0 closures;
- 0 casefiles in which one party withdrew from the procedure.
Means of filing compliant applications:
- 178 were submitted via the app (website) ó 87%;
- 21 were emailed ó5%;
- 3 were mailed ó5%;
- 2 were brought to, and registered by consumers with the office of ABDRC ó 1%.
The applications received from consumers covered the following topics:
- Problems in connection with credit products:
- Refunds (of fees/commissions, interest);
- Reduction of loan principal/debt/instalment, or writing off overdue amounts;
- 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 (bank assurance);
- Interest recalculation;
- Payment commitments;
- Maturity acceleration;
- Credit Office (deregistration from CO);
- Removal of certain clauses;
- Deferral of payments/Decrease of instalments for persons affected by the COVID19 pandemic.
- 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 amounts wrongly transferred by consumers (internet banking);
- Requests for clarifications as to calculation and 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.);
- Repayment of garnished amounts;
- Mortgage deregistration.
Applications are closed when traders refused the settlement of the disputes via the ADR procedure, and reasons for closing compliant applications fall within 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.
- 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.
The interest of consumers in ABDRC has raised compared to last year (even under the current pandemic conditions). The figures for the end of Q1 this year, compared to those of the same period of last year, are approximately 20% better in terms of the number of applications received. If we are to look into the cases addressed (under resolutions, or by amicable settlement after an initial referral to ABDRC), the situation is similar to that of last year.
Q1 2021 enjoys a monthly average better the average of 2020, in respect of the number of applications, and better than the average of Q1 2020 in respect of the number of amicable settlements between the parties, after an initial referral to ABDRC.
|Q1 2020 in figures:
· 541 compliant applications – 180 applications per month, an average of 42 applications/week);
· 199 applications admitted by banks:
o 155 casefiles (an average of 52 casefiles/month);
o 44 applications settled amicably by the parties after an initial referral to ABDRC – (an average of 15 amicably settled applications/month).
2020 in figures (entire year):
· 2,498 applications – 208 applications per month;
· 565 casefiles – 47 casefiles per month;
· 323 amicable settlements – 27 amicable settlements per month.
|Q1 2021 in figures:
· 644 compliant applications – 215 applications per month (an average of 50 applications/week);
· 184 applications admitted by banks:
o 130 casefiles (an average of 43 casefiles/month);
o 54 applications settled amicably by the parties after an initial referral to ABDRC – (an average of 18 amicably settled applications/month).
The ABDRC services continue to be accessed by Romanian consumers, even to an increased extent during the pandemic.
The benefits of conciliation:
- avoidance of court proceedings, and continuation of the contractual relations between the parties;
- short case settlement time (less than 90 days);
- 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), and
- no charges for consumers;
are strong arguments for both the consumers, and the financial and banking institutions involved in these negotiations, particularly during economically difficult times, like the ones we have gone through since the beginning of last year.
In this context, the conclusions drawn for the first three months of the year 2021 are as follows:
- The higher number of applications reported in Q1 2021 vs. Q1 2020 (+20%) is driven by a constant inflow of applications, for the entire reference period. The pandemic-triggered crisis did not materially affect either the number of applications referred to ABDRC (an average of 48 applications/week for the entire year 2020, and approximately 50 applications/week in Q1 2021), or the number of casefiles formed (the weekly average staying flat at approximately 10 – 11 casefiles, for the entire duration of the pandemic). Many consumers became unemployed/were furloughed, or their work was suspended, which could lead to an increase in the number of applications referred to the Centre (during the upcoming period, after the legal or conventional moratorium has expired), in an attempt to find solutions, together with the bank/NBFI, to the difficult economic situation we all go through.
- The number of casefiles settled and amicable settlements reached remained relatively flat v Q1 2020, which shows the availability of the financial and banking institutions to continue to negotiate with consumers, even if the professional activity of both consumers and the banks/NBFIs was affected by the evolution of the sanitary and economic crisis. The ADR departments of the commercial banks expeditiously processed the applications, and they appeared more financially available to address the problems occurred.
- During the first quarter of the year 2021, ABDRC adjusted its work to the conditions demanded by authorities. Thus, approximately 95% of the Centre’s work was moved online exclusively, 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 mediate the relation between consumers and traders.
- The developments of the past years point to a significant reduction in the number of applications registered with ABDRC, but refused by banks (no casefile formed): from 60% in 2016 down to 40% in 2018, 31% in 2019 and 28% in 2020. For the running year, one of the objectives pursued is to reduce the rate of applications rejected by the banks below 20%. This is an actionable objective, so much the more that the unreasonable rejection/closure rate of banks stays at approximately 17%, at the end of Q1 2021.
- At the end of Q1 2021, the share of cases concluded with a resolution further to negotiations (in which the parties accepted the solution proposed by the conciliator) is 94% 6% closures (cases when the parties did not reconcile).
- As of Q1 2020, ABDRC can also address conciliation applications received from legal entities related to payment services and electronic money issuing. While such applications have already been received by ABDRC, these were not accepted by the 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. By email, the classic procedure, documents used to be processed in approximately one day. The online 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.