More than 20 lawsuits came to an end this year because the banks and the consumers decided to submit their disagreements to negotiation via the Alternative Banking Dispute Resolution Centre (ABDRC). A datio in solutum case covering three different loans which, after close to 5 years spent in court, was settled by negotiation in just a couple of months, is such an example. Considering that the clarifications to the term hardship were qualified by the Constitutional Court of Romania as constitutional, we urge the banks to be more open to any consumer claims for rebalancing their contracts and only when the outcome is not that intended, to pursue the procedures provided by ABDRC, by negotiation and with involvement of an neutral specialist, the conciliator. In fact, we see that also the European Court of Justice recommends individual negotiation (a case where a consumer of Spain reported allegedly abusive clauses in his contract with the bank). (more…)

The negotiations between consumers and banks via the Alternative Banking Dispute Resolution Centre (ABDRC) have run even faster this year, and the number of cases concluded with reconciliation of the parties has increased by more than 80% compared to the first half of 2020. The negotiation outcome follows the same increasing trend. In mid-year, the benefits of negotiations have already exceeded EUR 800 thousand, the largest half-yearly amount since the Centre was established. In fact, 95% of the negotiations conducted this year concluded with consumers and banks accepting the solutions proposed by conciliators. We welcome the piece of good news that, as of June, face-to-face negotiations involving consumers, representatives of banks and conciliators in the premises of ABDRC have been resumed. (more…)

The conciliators of the Alternative Banking Dispute Resolution Centre (ABDRC) will advise Romanian consumers of financial services in the largest cities of the country on how to file their applications and what they need to do to have a successful negotiation with the bank or NBFI. The information campaign will run for five months and will target consumers in Arad, Timiș, Cluj, Galați, Iași, Constanța, Bihor, Dolj, Brașov, Argeș and Prahova. Because of the pandemic, the Caravan organized by ABDRC by way of regular meetings with consumers, representatives of commercial banks, journalists and local authorities was no longer possible since the end of 2019. At the same time, conciliations were organized online or by phone only. Under such circumstances, we believe that we need to organize an online information campaign, also supported by local media, which should guide consumers on how to draft their applications to enter into negotiations with the credit institution, but also covering the rigors, limitations and requirements of a distance negotiation. (more…)

Starting with 2019, the Alternative Banking Dispute Resolution Centre (ABDRC) has been received an increasing number of applications from consumers asking for deregistration from the Credit Register. Unfortunately, these applications fall outside the scope of a negotiation process with the bank or the NBFI, as it usually happens, in the conciliation procedure. ABDRC refers such applications to the credit institution or non-banking financial institution, and Centre may only check whether the consumer was duly entered in this database. For this reason, 9 of 10 applications seeking deregistration from the Credit Register are rejected by banks and NBFIs and, eventually closed. The reminder 10% are settled amicably, after a referral to ABDRC. This means that the deregistration decision rests with the traders and does not involve a negotiation via the Centre any longer.
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The health crisis affects consumers, businesses and the entire business environment, but it also has good parts, say the representatives of the largest financial institutions in the banking system. In 2020 and 2021, more than 708,000 consumers have asked banks to postpone the payment of instalments, in addition to those who have requested this from NBFIs. However, the pandemic has facilitated a better relationship between consumers and banks, and negotiation within the Alternative Banking Dispute Resolution Centre (ABDRC) is a tool that credit institutions intend to use more in the coming period. Reviewing each case individually and finding customized solutions is more desirable than moratoria, which offer general solutions, say bank representatives. ABDRC asked the top management of the largest commercial banks in Romania about how the pandemic has changed the consumer-bank relationship. You can find the answers in this press release. (more…)

Having reviewed the applications filed by consumers with ABDRC, we collected a number of problems these have already been facing, even after benefiting of instalment payment deferral over the maximum 9-month period. Moreover, these problems can worsen in the period to come. For this reason, banks should be prepared for many consumer defaults under the new repayment schedules, regardless of this instalment deferral relief. So far, ABDRC has received approximately 250 applications from consumers seeking, among other things, also instalment deferral due to the financial difficulties triggered by the pandemic. Many of them either did not fall under the scope of the applicable regulations (because of overdue debts or the expiry of the maximum 9-month term), or asked the banks for additional solutions to help them overcome their financial difficulties. (more…)

The average amount of the benefits obtained from the negotiations intermediated by the Alternative Banking Dispute Resolution Centre (ABDRC) has went up by close to 40%, up to EUR 3,700. Last year, the total benefits stemming from the negotiations between consumers and banks were in excess of EUR 1.3 million, the highest figure since the establishment of ABDRC, five years ago. The amount of the benefits obtained from the negotiations between consumers and banks/NBFIs in years 2016-2020 exceeded EUR 4 million. (more…)

Pay attention to the cost of loan instalment deferral! Recommendations from ABDRC

Description: Payment deferral for the loans taken before 30 March 2020 is possible this year, too. So far, approximately 560,000 debtors have benefited of legislative and private moratoria, accounting for 14.7% of the total loans extended by the banking sector. And because instalment payment deferral can have a lot of consequences which could also have side effects for consumers, the Alternative Banking Dispute Resolution Centre (ABDRC) issues a number of recommendations for them. More information is available in the enclosed release, and accessing this explanatory link: https://www.youtube.com/watch?v=sXWPyKxRKMY&feature=youtu.be (more…)

By December 2020, the Alternative Banking Dispute Resolution Centre (ABDRC) observed a tenfold increase in the number of applications for negotiations with banks and NBFIs compared to 2016 – its first year of operation (2,430 applications reported in the beginning of December 2020 v 235 applications in 2016). The effects of the sanitary crisis and the decisions postponing payment of instalments have taken their toll on the appetite of banks and NBFIs to negotiate, bringing it down to the level of 2018. Thus, only a quarter of the applications were accepted by banks and NBFIs for negotiation (545 casefiles formed before December 2020), meaning 20% fewer than last year. Even in such difficult conditions, not all consumers approaching ABDRC seek financial benefits from the banks they negotiate with.

Some of them only want to have contract clauses clarified, or be explained the decisions made by the credit institution. (more…)