Since 1 March 2016, we have witnessed more than 1,500 negotiations between consumers and banks/NBFIS, of which 1,300 concluded with an agreement between the parties thereto. Overall, consumers have so far obtained benefits of EUR 3.5 million further to these negotiations. ABDRC establishment put in place, for the first time in Romania, the legal framework for such negotiations on a contract in progress. Thus, the relationships between banks and consumers could be rebalanced by reducing or even removing fees, reducing interest, or writing off or down the principal and other ancillary lending costs. The value records are as high as RON 298,000, CHF 44,600 or EUR 52,000, and some cased ended up being resolved in just one day. Of the loans submitted to conciliation, 54% are in RON, 23% in EUR and 20% in CHF.

September 10, Bucharest. Five year ago, in early September, the Government Ordinance No 38/2015 came into effect to establish the Alternative Banking Dispute Resolution Centre (ABDRC). Transposition of a number of European Directives made possible for institutions dealing with alternative resolution of disputes between consumers and traders to operate in Romania, drawing on the model already established in most of the Western European industries. While the relevant Directive recommended that consumers would bear some small costs of their negotiations with the bank or NBFI, this Ordinance made this service free of charge in Romania. Following the same European model, this kind of “private justice” was to be financially supported by the traders that gave rise to the grievances of consumers. While the costs covered by traders for a case resolution is approx. EUR 200, the average benefits obtained by consumers who negotiate with banks are in the range of EUR 2,700 (going up from EUR 2,150 in 2019).

What have the first five years brought along

Since 1 March 2016, we have witnessed more than 1,500 negotiations between consumers and banks/NBFIS, of which 1,300 concluded with an agreement between the parties thereto. Overall, consumers have so far obtained benefits of EUR 3.5 million further to these negotiations.

This shows also the quality of the solutions proposed by the 19 ABDRC conciliators, all of whom are specialists with a strong legal background, university professors, or former judges. ABDRC establishment put in place, for the first time in Romania, the legal framework for such negotiations on a contract in progress. Thus, the relationships between banks and consumers could be rebalanced by reducing or even removing fees, reducing interest, or writing off or down the principal and other ancillary lending costs.

The value records are as high as RON 298,000, CHF 44,600 or EUR 52,000, and some cased ended up being resolved in just one day. Of the loans submitted to conciliation, 54% are in RON, 23% in EUR and 20% in CHF.

The negotiations applications have also increased in number year after year, and this year we except to see ten times more applications than in 2016. For instance, of the applications received, 16% aim to have fees reduced or removed.

As at 30 October 2018, ABDRC observed more than 1,000 applications received in one year. In early September 2020, we had already received 1,900 applications, and more than 5,800 in all years of operation.

What does ABDRC aim for in the next period

“First of all, we expect that the number of applications rejected by banks would not be in excess of 10% of the total applications filed by consumers. Then, we want to make ABDRC the avenue of choice for any consumer who has a grievance against a bank or NBFI. Thus, some of the caseload would be taken off the courts, the complaints filed with the National Consumer Protection Authority (ANPC) would continue to decrease, and consumers would become more financially literate.

We except to see NBFIs becoming at least as receptive as banks in accepting the negotiation applications filed by consumers. And since NBFIs and banks operate in the same market of financial services, we can say that non-banking financial institutions would be faced with a competitive disadvantage unless they accommodate amicable settlement of consumer grievances.

We trust that the choice of conciliation would become increasingly more popular and used among legal entities, too. As of this year, the scope of ABDRC was extended so as to address also payments and the issue of electronic money.

Last but not least, we except to see a successful conclusion for the steps taken by the Ministry of Economy, Energy and Business Environment to have ABDRC included in the FIN-NET network of the European Commission, as an ADR entity. This would clear our access to the rich expertise of peer FIN-NET entities across Europe, and allow us to further develop, in particular in terms of digitalisation and staff training.

Also, we hope that after five years of operation, the Parliament would eventually turn the Government Ordinance 38/2015 into law.”, says Alexandru Păunescu, President of ABDRC Steering Board.

ABDRC, at a glance

We summarised in a newspaper both the work of the Centre, as well as the opinions of the key players in the financial and banking market about negotiation between consumers and banks/NBFIs. The electronic version of this newspaper can be read here:

The Governor of the National Bank of Romania, Mugur Isărescu, urges “all banks to turn to ABDRC. While reconciliation of the parties seemed impossible at first, as conciliators and the Centre came into picture, the impossible has gradually become possible. It serves no interest to have or feed a war between banks and clients.”

Paul Anghel, General Director of the National Consumer Protection Authority (ANPC) and former ANPC representative sitting in the Centre’s Steering Board says that “the image of the financial and banking institutions can be reversed by ABDRC. Romanians have high expectations from ABDRC, about as high as the lack of trust in the financial and banking system. This gives us the duty to start building this trust.”

Florin Dănescu, Executive President of the Romanian Association of Banks: “ABDRC strengthens the trust between clients and the banking system. Not only that it provides an alternative dispute resolution system, but it also acts as an active information centre that supports both consumers and the banking system by identifying the best ways for parties to reach an agreement.”

Irina Chițu, Financial Analyst and Manager of Finzoom.ro, thinks that “ABDRC is the best thing that has happened to the financial community in the past five years.” Mihai Mereuță, President of Habitat League believes that ABDRC can stand for a model for establishment of similar centres in industries such as public services, telephony, utilities, transport, etc.

As regards the actual negotiation, the Centre’s conciliators have come up with a new profession in Romania:

Conciliation is a new philosophy that is approached increasingly more by both consumers and banks. Still, their expectations should not concern only the other party. Both parties should be willing to compromise, and the role of conciliators is precisely to take the parties out of their rigid position.   (Camelia Popa)

With this procedure, we help the contract between the parties survive. An adjusted contract is just like a coat that fits both the consumer and the bank better. The expeditiousness of this procedure won me over from the start. From this perspective, my personal record was when I helped resolve a case in only one day! From dusk till dawn, the parties had their resolution signed, sealed and delivered! (Nela Petrișor)

At first, I was rather reluctant that this beautiful idea would work. The idea of banks and consumers not taking irreconcilable positions seemed utopic back in 2015. But ABDRC managed to bust the myth that debtors and creditors are “natural born enemies”.” (Radu Rizoiu)

When I first heard about the Centre, I pictured it like “a giraffe”. I was like Marin Preda’s villager in a zoo saying that this animal did not exist. But here it is! The Centre not only that managed to survive, but also proved its efficiency in all these years. (Valeriu Stoica)

I would recommend bank to be more flexible, and consumers to show more patience. We can only have genuine conciliation when consumers settle for less than they claimed, and banks offer more than what they were initially willing to give. (Valentin Cocean)

About ABDRC: ABDRC is an entity set up under a European Directive, and intermediates, free of charge and in not more than three months, negotiations between consumers and banks or NBFIs, for contracts/agreements in progress. Consumers from any county of the country may file applications with the Alternative Banking Dispute Resolution Centre (ABDRC) filling-in an online form directly on the website www.csalb.ro. When the bank accepts to enter the conciliation negotiation procedure, a conciliator is appointed. ABDRC works with 19 conciliators, of the best specialists in law and with relevant experience also in the financial and banking field. Everything is settled amicably, and the understanding between the parties has the power of court judgment. More information about the work of the Centre is available by phone at 021 9414 (charged a normal rate).