The statistical data shows that the number of consumers who approached ABDRC in Q1 2023 observed a slight increase (approximately 23%) compared to Q1 2022. If we are to relate to the cases solved (with resolutions or with amicable settlement further to a referral to ABDRC), the results at the end of Q1 of this year are 20% better than in the same period of last year, with increase in both the number of cases formed, and the number of direct amicable settlements between the parties (having first approached ABDRC).

During the first three months of 2023, as many as 149 consumers went through the entire conciliation process (application filing, negotiation, final resolution – solution accepted by both parties), and 148 consumers reached an amicable settlement directly with banks/NBFIs, having first approached ABDRC. The situation is better than in the similar period (Q1) of 2022, when 137 resolutions (an increase by 10% of this statistical indicator) and 112 amicable settlements (an increase by 33% this year) were on record.

In the first quarter of the year, 73 court proceedings were closed because the parties decide to pursue, and successfully reached, an amicable settlement via ABDRC.

Starting with Q1 2020 legal entities can also refer to ABDRC cases related to payment services and electronic money issuing. ABDRC received 3 such applications during the reference period, but the financial institutions these were intended to turned down 2 of them, and one application is still being reviewed.

The number of applications registered in Q1 2023 (884 applications) reflects an increase of approximately 23% compared to Q1 2022 (716 applications). This organic evolution could be explained also by the months of generalized price rises (with the war at the borders of Romania continuing), and by the evolution of the ROBOR and IRCC indices used to calculate the payable monthly instalments to be paid, for loans with floating interest rate. Many consumers experience genuine difficulties in making the due payments, and these justified circumstances require identification of solutions to rebalance the contractual obligations (with the applications being submitted directly to creditors, or via ABDRC).

Of the total number of applications received by the end of Q1 2023, 573 concerned different issues in relations with banks (65% of the total), whereas 311 concerned different issues in relations with NBFIs (35% of the total).

Thus, compared to the end of Q1 2022, the share of applications intended at NBFIs decreased: from 41% of the total in Q1 2022, down to 35% of the total in Q1 2023.

Moreover, the share of applications intended at banks went slightly up, from 59% of the total in Q1 2022, up to 65% of the total in Q1 2023.

In this statistical slot, we need to highlight also that, in the first three months of this year, the applications for deregistration from the Credit Register (CR) observed an evolution similar to that of the last year.

Thus, at the end of Q1 2023, we saw 355 applications for deregistration from CR (104 intended at banks + 241 intended at NBFIs), while the number of this type of applications in the entire 2022 was 1,034 (317 to banks and 717 to NBFIs). It should be recalled that most of the applications concerning issues in relation to the Credit Office, the First House programme or assigned loans are closed because, on a case-by-case basis, these are governed by a special piece of legislation which leaves but limited or even no room whatsoever for negotiation.

The total number of cases formed at the end of Q1 2023 reached 204, of which 200 involved banks, and only 4 such casefiles concerned NBFIs (compared to the first six months of 2022, when 181 casefiles were formed, which means an increase of approximately 13% in the current year). Of the cases formed this year, 149 concluded with a resolution (the parties accepted the solution proposed by the conciliator), and other 46 casefiles are still being processed/negotiated. In 8 cases, one of the parties refused the solution proposed by the conciliator and a report was issued, and in one casefile, one of the parties withdrew.

The share of cases settled and concluded by a resolution (by the parties coming to terms) exceeds the share reported in the similar period of last year. This year, the total number of resolutions is 149, compared to the similar period of the previous year, when only 133 resolutions were reported (a 12% increase this year).

Furthermore, before the end of Q1 2023, 148 applications were settled amicably by traders after an initial referral to ABDRC (traders negotiated directly with consumers), broken down as follows: 56 applications settled amicably with banks, and 92 applications settled amicably with NBFIs.

In the end Q1 this year, we counted approximately 687 enquiries made by phone, and 126 persons/consumers accessed the chat function on the ABDRC website.

The break-down of applications by banks/NBFIs is as follows:

Banks:

• 573 compliant applications;
• 34 non-compliant applications;
• 162 requests for miscellaneous information.

Classification of the 573 compliant applications:

• 200 cases formed at the end of Q1 2023 (6 casefiles are formed in 2023 from applications received at the end of 2022);
• 88 applications in the screening phase – documents are being reviewed;
• 56 applications settled amicably by the parties, after a first referral by consumer to ABDRC;
• 227 cases were closed;
• 8 applications are adjoined.

Classification of the 200 cases pending in the procedure with proposed solution/conciliation:

• 148 resolutions handed down – the parties came to terms;
• 43 cases pending in processing phase;
• 8 reports – the parties did not come to terms;
• 1 case in which one of the parties withdrew.

Means of filing compliant applications:

• 323 were filed via the app (website);
• 229 were emailed;
• 7 were mailed;
• 14 were brought to, and registered by consumers at, the office of ABDRC.

NBFIs:

• 311 compliant applications.

Classification of the 311 compliant applications:

• 4 cases formed at the end of Q1 2023 (1 cases brought forward in 2023, with the application filed in late 2022);
• 64 applications in screening phase – documents are being reviewed;
• 92 applications were settled amicably between NBFIS and consumers, after a first referral by consumer to ABDRC;
• 152 were closed – rejected by the NBFIs.

Classification of the 4 cases pending in the procedure with proposed solution/conciliation:

• 1 resolution handed down – the parties came to terms;
• 3 cases pending in the phase of discussions with the parties.

Means of filing compliant applications:

• 276 were filed via the app (website);
• 30 were emailed;
• 1 was mailed;
• 4 were brought to, and registered by consumers at, the office of ABDRC.

The applications received from consumers can be grouped together in the following categories:

• Problems in connection with credit products:

• • Refunds (of fees/commissions, interest);
  • Shift from ROBOR to IRCC;
  • Reduction of the loan principal/debt/instalment, or writing off overdue amounts;
  • Rescheduling/refinancing;
  • Agreement renegotiation/rebalancing (including for hardship);
  • Credit Register (deregistration from CR);
  • Finding a solution to solve problems (in general);
  • Currency conversion;
  • Problems with insurance policies (bancassurance);
  • Interest recalculation;
  • Payment commitment;
  • Maturity acceleration;
  • Removal of certain clauses.

• Operational problems:

• • Problems with operation of the ATMs (including refunds);
  • Problems in connection with wire transfers and refunds of transaction fees;
  • Refunds in case of processing errors;
  • Recovery of amounts wrongly transferred by consumers (internet banking);
  • Provision of clarifications about calculation of the amounts withdrawn by banks from the credit card account;
  • Other card-related problems (cancellation/name change);
  • Problems related to exchange rates and interest rates applied when using the card abroad;
  • Problems regarding inter-banking transfers.

• Problems related to other types of activities:

• • Issues concerning foreclosure (stay/suspension);
  • Requests to be issued documents (repayment schedules, statement of account, etc.);
  • Refunds of garnished amounts;
  • Mortgage deregistration;
  • Banking fraud.

The main reason for closing an application is the refusal of traders to have the dispute settle via ADR procedure, and the reasons for closing fall into several categories:

• Good reasons (main) – the application concerns:
  • there are court proceedings in progress (in appeal/higher appeal), or a final judgment has already been rendered;
  • the selected trader is a third party for the consumer’s claims;
  • “First House” loans;
  • State premium under saving-lending contracts;
  • the petitioner is a legal entity, and the reported case falls outside the scope of Laws 209/2019 and 210/2019;
  • consumer asks for confidential information – the provision of which would violate Regulation 679/2016;
  • constraints enforced under the applicable special legislation – Card Organization Regulation.

• Reasons related to consumers:
  • the consumer failed to support their claims/to provide the information needed to have their claims settled, despite having been asked to supply it/the consumer withdrew.

NOTE:

The statistical data shows that the number of consumers who approached ABDRC in Q1 2023 observed a slight increase (approximately 23%) compared to Q1 2022. If we are to relate to the cases solved (with resolutions or with amicable settlement further to a referral to ABDRC), the results at the end of Q1 of this year are 20% better than in the same period of last year, with increase in both the number of cases formed, and the number of direct amicable settlements between the parties (having first approached ABDRC). This increase is driven including by the number of cases effectively settled and concluded with a resolution/the parties came to term (as an effect of the increased willingness of the parties to negotiate).

CONCLUSIONS:

The ABDRC services continue to be accessed by the Romanians who have problems with their banks/NBFIs. The benefits of conciliation: the court proceedings are avoided and the contractual relations between parties continue, the short case settlement time (time average of 25 days/case in 2022), the procedure is free of charge for consumers; and the expertise of conciliators, are all important benefits for both consumers and the financial and banking institutions involved in these negotiations, particularly during economically difficult times (the effects of the generalized price rises due to the war fought very close to the borders of Romania are acutely felt). In this context, the conclusions drawn for the first three months of 2023 are as follows:

• 884 Romanians approached the Alternative Banking Dispute Settlement Centre (ABDRC) in the first three months of this year to find amicable solutions in their relations with banks and NBFIs. Compared to the first three months of 2021, consumers filed approximately 23% more applications (884 applications at the end of Q1 2023 v 716 applications at the end of Q1 2022);
  • The fact that the traders operating in the financial and banking system continued to welcome the amicable (direct) settlement further to a referral to ABDRC is another way of solving the claims raised by consumers, particularly when these claims concern simple matters and do not necessarily require the intervention/expertise of the ABDRC conciliators: 148 such cases/Q1 2023 v 112 such cases at the end of Q1 2022 (an increase by 33% this year);
  • The number of cases formed in the first three months of this year it is growing compared to Q1 2022: 204 cases/Q1 2023 v 181 cases/Q1 2022 (an increase of approximately 13% this year);
  • The website csalb.ro offers a section dedicated to financial education, and ABDRC’s communication with consumers of financial services focused, in both 2022 and 2023, on this particular topic, which has become extremely important in the context of the unpredictable economic and social developments;
  • Revolving again around financial education, CSALB launched a project of podcasts with top executives of commercial banks and journalists specializing in the financial and industry, as well as editors-in-chief of some of the most important relevant publications. The materials will be promoted both on ABDRC’s own channels (FB, LinkedIn, YouTube, Instagram, TikTok), as well as by care of the indicated publications and other TV, radio, or online press channels;
  • CSALB also commenced a project where the conciliators of the Centre enter a live dialogue with consumers of financial services. These talks promoted and broadcasted on social media take place every month. Conciliators answer questions asked by consumers;
  • Another way of informing consumers is the ABDRC newsletter sent out to consumers of financial services who subscribed to receive this information;
  • Via its call-centre, CSALB contacts consumers who want this (having agreed to this in various social media campaigns) by phone They receive information about an alternative procedure to settled their disputes with banks/NBFIs;
  • In the first six months of the year, 73 court cases were closed because the underlying disputes had been amicably settled via ABDRC (compared to 67 such cases reported for the entire 2021, and 145 in 2022);
  • In the end of Q1 2023, the negotiation procedures between consumers and banks, via ABDRC, resulted into benefits of approx. EUR 0.7 million (approximately 35% of the total amount of the benefits obtained in all negotiations conducted in 2022). Thus, the total amount of the benefits obtained (in the more than 7 years of work of the Centre) is EUR 8.7 million.
  • The share of cases concluded with a resolution further to negotiations (in which the parties accepted the solution proposed by the conciliator) is at approximately 95% (for the applications resolve in Q1 2023). This percentage is clear proof that the amicable dispute resolution mechanism settles in the Romanian financial and banking market, and is practiced by a number of stakeholders: banks and some NBFIs, as well as many consumers, with all the parties involved driving benefits from amicable resolution.

The WEBSITE www.csalb.ro makes available also for legal entities an online tool, which allows for faster and smoother submission of the conciliation applications. On the first page of the website, consumers are prompted to access this application by filling in an application. The documents entered in the registration form are uploaded into the app, and their processing time is approximately one hour. The application was setup in observance of the principles of the General Data Protection Regulation (GDPR).

The Alternative Banking Dispute Resolution Centre (ABDRC) is an independent non-governmental apolitical, not-for-profit legal entity of public interest established under the Government Ordinance no. 38/2015 on alternative resolution of disputes between consumers and traders, which transposes at domestic level Directive 2013/11/EU on alternative dispute resolution for consumer disputes and amending Regulation (EC) no. 2006/2004 and Directive 2009/22/EC.