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.

The length, one of the reasons for the decrease in the number of lawsuits

According to the CURS survey conducted in July 2023 at the request of the ABDRC, consumers of financial products and services most value speed in resolving problems they have with banks and/or NFIs. Over the last two years, the average time to settle an out-of-court settlement between consumers and banks has been around 30 days in the ABDRC.

A direct channel of communication opened with the bank, free conciliation procedures for consumers, simplicity of negotiations, and the expertise of the conciliator are aspects that individual customers consider a priority in resolving their problems with banks/NFIs.

Amelia-Raluca Onișor, judge, Bucharest Court of Appeal: ”Litigation is expensive and time-consuming. The costs of litigation are not always limited to stamp duty and possibly lawyers’ fees. Most people do not take into account the other costs inherent in litigation, for example, the costs of carrying out various types of expertise. Along with other reasons, these can encourage us to be open to supporting alternative dispute resolution avenues such as the one available under the ABDRC. In order to strengthen the power of conciliation, information about the advantages of these means needs to be circulated, both to litigants and to the courts. […] Conflicts are inherent in a democratic society, but what is optional is the fight, especially the legal fight.“

Court cases brought to an amicable conclusion

Nearly 400 lawsuits started in court have been settled by negotiation in the ABDRC since 2021. This year 184 court cases were closed because the parties requested and succeeded in finding an amicable solution within the ABDRC (compared to 145 cases throughout 2022).

Most of them are being heard on substance, but a court case can be diverted to ABDRC in any stage of the proceedings, with the agreement of the parties. In fact, banks recommended customers to turn to ABDRC as soon as they were served the statement of claims. This means that negotiations can lead to a settlement even before the first court date.

The ABDRC recommends all county courts and local courts to direct consumers and banks to first find an amicable solution within the ABDRC and only if they have not found a settlement to follow the litigation route. Such an approach would also free the courts from lengthy and costly trials for all parties involved.

Alexandru Păunescu, representative of the National Bank of Romania in ABDRC: “We see something very interesting in the CURS survey this past summer: consumers of financial services and products most value speed in resolving a problem they have with their bank. Their expectations contradict what actually happens in court. There, litigation lasts at least two years, and in some cases the parties find out the judge’s verdict after 5 to 7 years. This may be one of the reasons for the increase in the activity of the ABDRC, where a negotiation conducted over the last two years was resolved in an average period of only one month. This year we had (compared to the first three quarters) the most claims in the last seven years, the most negotiations (i.e. claims accepted by traders), the most reconciliations and the highest number of court cases settled amicably through conciliation. These increases in the activity of the ABDRC, coupled with a decrease in the number of court cases by around 1,000 in a single year, show a deeper understanding by parties of the benefits of alternative dispute resolution. The notoriety of the ABDRC, including among magistrates, could not grow without the real advantages that conciliation offers. At the end of the year we will exceed €10 million, which is the value of all the financial benefits from the negotiations since 2016. We believe that this contributes to increasing consumer confidence in the banking system, in a period marked by multiple crises and international conflicts, in which banks have shown that they understand the problems faced by Romanians and seek to find solutions to solve them “.

More requests, negotiations and conciliations in 2023

• In the first nine months of 2023, 917 consumers have reconciled with banks and NFIs after going through the entire conciliation process (filing a claim, negotiation and settlement accepted by both parties in 475 cases) or have reached an amicable settlement directly with the banks/NFIs having first approached ABDRC (in 442 cases). The increase is more than 11% compared to the situation recorded in the first 9 months of 2022, when 823 Romanians were in one of these two situations;

• Since the beginning of the year 2,209 conciliation requests have been sent by consumers, 10% more than last year. Of these, 1,410 were addressed to banks and 799 concerned various aspects of consumers’ relationship with NFIs;

• Of all the requests sent, 949 are requesting deletion of Credit Office records (305 are addressed to banks and 644 are in relation to NFIs). The number of requests on this subject is slightly down on last year, when 998 applications concerned this issue;

• Since the beginning of the year, NFIs have accepted only 4 requests for negotiation, but have directly dealt with 295 of the consumer requests, the majority of which were requests to delete Credit Office records. These are not subject to negotiation within the ABDRC, as they are simple cases that can be resolved by direct request to the trader;

• Banks accepted 571 requests for negotiation in the first 9 months, 14% more than in 2022. Of these, 475 have already been concluded with both parties accepting the settlement solutions proposed by the ABDRC conciliators, 20% more than in 2022;

• 93% is the percentage of negotiations concluded with a conciliation in the first three quarters of 2023. This percentage is clear evidence that the actors in the Romanian financial-banking market (banks, NFIs, consumers) are increasingly turning to the amicable dispute resolution mechanism.

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 requests 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).