Loan restructuring was the main solution found by consumers and banks this year, following negotiations at the Alternative Banking Dispute Resolution Centre (ABDRC). Since the start of the year, more than 2,640 consumers have filed applications for negotiation with banks and NBFIs via the ABDRC. The main problems they reported were related to difficulties in paying their instalments. The majority of the 680 negotiations since the beginning of the year have resulted in the restructuring and rescheduling of loans, decrease of the loan balance, decrease of interest and cancellation of debts due to late payments. The solutions negotiated through the ABDRC conciliators were mainly aimed at reducing the monthly instalments and adjusting the loan agreements to the consumers’ current financial situation. ABDRC has recorded the highest number of applications and negotiation files in any one year since the start of its operations (2016).

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The number of lawsuits between consumers and banks is at its lowest level since 2015, the year the Alternative Banking Dispute Resolution Centre (ABDRC) was established. While there were around 40,000 lawsuits between consumers and banks between 2015 and 2016, and last year the number of disputes was 13,000, in 2023 the banking system’s records show that the number of lawsuits has dropped to 12,000. Instead, negotiations and conciliations between consumers and banks within the ABDRC have increased. In the first 9 months of the year, 575 people negotiated better terms for existing contracts with banks, and so far, 475 of them have reached an agreement with the bank and found a solution to the problems reported, 20% more than in the same period of last year. (more…)

More than half (56%) of consumers of financial products and services believe that the very banks and NBFIs should afford them protection through a transparent commercial offer, clear contract clauses and explanations provided to consumers, concludes a CURS survey conducted at national level and commissioned by the Alternative Banking Disputes Resolution Centre (ABDRC). On the other hand, two thirds (66%) of them are not aware of which institution should protect their rights, or do not feel protected at this time. From 12 to 25 July 2023, the Centre for Urban and Regional Sociology (CURS) conducted a quantitative survey, commissioned by ABDRC, on a sample of 1,067 respondents who are decision-makers or co-decision-makers in their household’s relationship with the bank. Data collection was carried out by face-to-face interview at the respondents’ homes.

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Refinancing, switching to IRCC and fixed interest are the main ways Romanians have lowered their loan rates. Only 21% of Romanian consumers of financial products and services say they had problems with banks and NFIs in 2022 and 2023, according to a nationwide CURS survey conducted in July at the request of the Alternative Banking Dispute Resolution Centre (ABDRC). However, the rising cost of living (mainly due to utilities and higher food prices) has affected the majority of Romanian consumers, and more than half of them have found a way to reduce spending. Nearly a third of those surveyed point to saving as a solution to financial problems. From 12 to 25 July 2023, the Centre for Urban and Regional Sociology (CURS) conducted a quantitative survey, commissioned by ABDRC, on a sample of 1,067 respondents who are decision-makers or co-decision-makers in their household’s relationship with the bank.

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In the first six months of 2023, the banks accepted for negotiation 420 applications files by consumers of financial services to the Alternative Banking Dispute Resolution Centre (ABDRC). Banks appear to be 27% more eager to negotiate than during the same period of 2022, and the number of successful negotiations increased by 30%. Thus, so far, in 340 cases, consumers went through the entire conciliation process (application filing, negotiation, final resolution – a solution accepted by both parties), which is one third more than during the same period of 2022. Other 290 consumers reached an amicable settlement directly with the banks/NBFIs, having first approached ABDRC. Compared to last year, the number of direct settlements increased by 20%. (more…)

Romanian consumers assimilate their financial education and experiences of recent years differently. Financial crises, over-indebtedness and foreign currency loans are lessons from the past that have changed the behaviour of many consumers for the better: many are saving, taking out credit insurance and giving up impulse purchases, banking officials say. On the other hand, there are also consumers who have stayed in the past and want to borrow more than they could pay or apply for loans in foreign currency, although they receive their salary in lei. The negotiations within the ABDRC and the compromises between consumers and banks are solutions for the crisis situations encountered by Romanians. These are some of the conclusions drawn by the representatives of the banking system interviewed by journalists in the financial education project initiated by Alternative Banking Dispute Resolution Centre (ABDRC).  These interviews are captured in 12 financial education podcasts addressing current topics for the economy of Romania. The quotes and video links in the press release contain pieces of the podcasts with representatives of Banca Transilvania, BRD – Groupe Societe Generale, Exim Banca Românească, as well as of the interview with Professor Valeriu Stoica, honorary conciliator with ABDRC. (more…)

Arges Specialized Tribunal and Pitesti District Court are the first courts of the country to formally recommend, through their judges, conciliation between consumers and banks/NBFIs.

 Since the beginning of the year, as many as 73 disputes pending before courts in 18 counties of Romania have been eventually resolved through negotiations, in the Alternative Banking Dispute Resolution Centre (ABDRC). Since 2021 and to date, more than 280 court proceedings have been settled off-court because the parties wanted and managed to find a solution by negotiation, via ABDRC. (more…)

The lessons of the financial and economic crises that Romanians have gone through over the last 15 years are valuable sources of information for the future financial decisions. The cyclicality of these crises is the key argument for making the right decisions, even during economically optimistic times. These are some of the conclusions drawn by the representatives of the banking system interviewed by journalists in the financial education project initiated by Alternative Banking Dispute Resolution Centre.  Consumers and banks have reacted well to this complicated financial and banking market setting we’ve unfortunately been witnessing for more than one year now. Many consumers have switched from ROBOR to IRCC and thus managed to shelter themselves against important increases in their monthly instalments, but only for a few months. Others, switched to fixed interests rates amid the increase in the floating rates. Whatever savings had been made before the pandemic, were used to early repay loans. Last but not least, more than 3,500 consumers have approached ABDRC since March 2022 in an attempt to negotiate amendments to their contracts with banks and ease the repayment burden. (more…)

In the proximity of a way and in difficult financial and social times, financial education can steer the path a people towards either poverty or prosperity. Building on this assumption, the Alternative Banking Dispute Resolution Centre (ABDRC) has taken steps to provide information to the consumers of financial information about their relation with banks and their own finances. During the 12 meetings hosted by ABDRC, economic journalists of repute talk to presidents or vice-presidents of commercial bank, the Legal Director of the National Bank of Romania and the management of the Romanian Association of Banks, university professors, and well-known lawyers. These interviews are captured in 12 financial education podcasts addressing current topics for the economy of Romania. Invitees to the first series of podcasts speak about: role of saving and responsible lending, and about how artificial intelligence will influence the relationship between consumers and banks. (more…)