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.

The methodology used is based on a sample universe of households where at least one member of the household has had a relationship with a bank in the last 24 months. The maximum margin of error for the whole sample is +/-3% at 95% confidence level. Data collection was carried out by face-to-face interview at the respondents’ homes. The validation of the sample was based on the latest data provided by the National Institute of Statistics (INS). The data collected were not weighted.

The cause of financial problems and solutions to solve them

Two-thirds of respondents (70%) cite utilities as the main source of their financial problems, and 54% believe that food and medicine prices are the main source of the problems they face. Loan instalments are cited by 51% of respondents, and 40% cited fuel and transport costs as the source that most affects their spending. 15% of those surveyed say they have no financial problems.

In terms of how respondents are trying to manage or deal with general financial problems (not just with the bank), the data reveals that 55% have reduced spending on food, utilities and holidays, whereas 29% are saving and building up a reserve or emergency fund. Also, 26% of respondents say they have taken an extra job to cope with financial problems, and for 20% information and self-education is one of the solutions used to solve financial problems.

Where do problems with banks occur and what are the solutions consumers find

Over the period 2022-2023, the majority of respondents (76%) say they have had no problems with creditors. 13% of Romanians say they have had problems with banks in the past but no longer do, and 6% are still experiencing problems. Between 2022-2023, 3% of consumers had or have problems with NFIs.

In relation to banks/NFIs, consumer or personal loans are the main source of problems for 54.3% of respondents, while mortgage or real estate loans (with real estate guarantee) are the main source of problems for 24.1% of respondents.

In terms of how respondents (who had problems in their relationship with their bank or the NFI in the period 2022-2023) resolved these problems, 33% managed to refinance, restructure or reschedule their credit, 17% switched from ROBOR to IRCC, while 16% switched from variable to fixed interest. An important share (13%) is accounted for by those who tried/succeeded in negotiating with the bank/NFI within the ABDRC when they encountered a problem with the credit institution.

Alexandru Păunescu, representative of the National Bank of Romania in ABDRC: “Public opinion surveys are one of the most important tools we can use to meet the needs of financial services consumers. The analysis provided by CURS, a prestigious public opinion surveying institution, reflects how Romanians have reacted to the financial problems they have faced over the past two years. Fortunately, three quarters of consumers have not had any problems with banks or NFIs in the last two years, although loan instalments rank third, after the price of utilities and food, as the source of financial problems faced by Romanians. This shows that in the face of difficulties caused by the rising cost of living, consumers have been quick to look for solutions, not scapegoats. Whether refinancing their loans, changing contractual parameters from variable to fixed interest rates or from ROBOR to IRCC, consumers of financial products and services have been actively involved in reducing their loan instalments. We are glad that the solution of negotiating with the bank or the NFI, through ABDRC, is on the list of the most important options that consumers had in overcoming this difficult period.

This year, until the beginning of September, more than 2,000 consumers have requested through ABDRC a negotiation with their bank or the NFI to solve problems in outstanding contracts. So far banks have agreed to enter into more than 520 negotiations and the NFIs in only four. Apart from these negotiations, in almost 400 cases that were simpler in terms of the issues complained of, the parties settled directly after referral to the ABDRC. Most of these direct settlements (about 260 cases) are preferred by NFIs”.

About ABDRC: ABDRC is an entity set up under an 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. Once the bank accepts to enter the conciliation/negotiation procedure, a conciliator is appointed. ABDRC works with 17 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).