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ABDRDRC: Out-of-court Resolution for Consumer Disputes

ABDRDRC is an independent entity that manages the alternative resolution of disputes between consumers and banking and financial institutions in a fair and expedited manner. We aim to satisfy consumers, rebuild trust, and shift the consumer mindset towards amicable dispute resolution.

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ABDRDRC: Out-of-court Resolution for Consumer Disputes

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  1. MARCH 2018

  2. ABOUT ABDRC Independent apolitical not-for-profit entity of public interest Established under a Government Ordinance (Government Ordinance no. 38/2015 on alternative resolution of disputes between consumers and traders) Established further to national transposition of an European directive (Directive 2013/11/EU on alternative dispute resolution for consumer disputes) Manages the infrastructure required for alternative resolution of the disputes between consumers and the banking and financial institutions in a balanced, reasonable, expeditious and out-of-court manner, working with experts in the banking and financial sector (conciliators) who, according to the procedure chosen by the parties, may propose/impose a resolution solution for the dispute.

  3. What do we want • Satisfied consumers who carry through the loan or other services agreements they accessed in time • Out-of-court resolution of disputes • Rebuilt trust of consumers in the banks and NBFIs the clients of which they are • A shift of consumer mindset as regards amicable alternative resolution of disputes

  4. Steps towards conciliation

  5. Status of applications 2018 • The number of compliant applications registered in 2018 represents more than 50% of the total 2017; • Only 2.5% of all requests were non-compliant applications; Compliant applications registered Requests for various information Non-compliant applications *Data available at 23 March 2018

  6. Compliant applications 2018 • More than 52% of compliant applications have been turned into casefiles. • 20% of the files are in the screening phase In the screening phase Closed Turned into casefiles *Data available at 23 March 2018

  7. Status of casefiles 2018 *Data available at 23 March 2018

  8. Highlights 2017 • Compared to 2016: • +148% written applications • +115% compliant applications • +365.2% compliant applications turned into casefiles • Close to 5 times more casefiles resolved MERGER OF TWO LOANS MORTGAGE LOAN IN EUR + PERSONAL LOAN WITH MORTGAGE Interest rate reduction from 9.5% down to 3.5% p.a. Removal the management fee Principal reduction by EUR 7,000; Monthly installment reduction from EUR 700 down to EUR 310 LOAN IN EUR Removal the management fee Monthly installment reduction from EUR 280 down to EUR 185 Principal reduction by EUR 18,500 LOAN IN CHF, CONVERSION INTO RON Removal of financing fee; interest rate reduction from 6.8%+LIBOR down to 3%+ROBOR p.a. Monthly installment reduction from RON 3,800 down to RON 2,400 Principal reduction by CHF 21,000;

  9. Developments in applications Developments in applications • The number of compliant applications registered in 2018 has reached 62% of the value recorded in 2017; • The number of non-compliant requests remains constant; Requests for various information Compliant applications registered *For 2018, the data available on 23 March 2018 were taken into account

  10. Classification of CASEFILES • In the first months of 2018, 77 casefiles were finalised, almost half of the number registered in 2017 • 69 casefiles created in 2018 are in the phase of discussions with the parties; Total no. of casefiles Casefiles favourably resolved Closures * Data available at 23 March 2018

  11. Recurrent applications • return of the management fee, the monitoring fee or other categories of fees which - in the opinion of consumers - have been unreasonably charged; • rescheduling of loans; • reduction of the monthly installments, when the consumer assesses that the monthly installments have been abusively increased by the business; • return of the amount resulted from the excessive increase of the interest rate, as perceived by consumers; • reduction of the interest rate, and freezing of exchange rate at the rate applied at execution of the loan agreement (in CHF); • declaring the loan early due, in disregard of the contractual conditions; • calculation and payment of the installments in RON, at the rate of exchange applied at the time when the agreement was concluded; • removal of clauses qualified by consumers as abusive, as regards application of default interests; • deregistration of entries in the Credit Register etc.

  12. Casefiles resolved 2018 Personal loan in RON The bank erased the consumer's current balance, amounting to RON 23,000, following the death of the borrower. Personal loan in RON Removal of the management fee of RON 39. It will have a fixed interest rate of 6%/year. Principal reduction by EUR 1,000. Monthly installment reduction from RON 241 down to RON 121. Personal loan in RON and an overdraft Cancellation of the debt of RON 5,900. Rescheduling the remaining 24-month loan instalments, amounting to RON 663 per month. Personal loan in EUR Removal of the risk fee of EUR 50/month The bank returned EUR 3,200 The loan was fully refunded. Commercial Gesture Cancellation of debts amounting to RON 25,000 to a personal need loan in RON and closing the loan. The consumer is still to pay the First House loan. Mortgage loan in RON Interest rate reduction from 1.25% p.p. down to 3.5% p.a. Loan balance reduction by RON 2,250 Removal of the monthly management fee of RON 75 The bank refinanced the loan with a one-year reduction of the reimbursement period.

  13. Casefiles resolved 2017 Mortgage loan in EUR Removal of the management fee of EUR 70/month Reduction of principal by EUR 9,800 Reduction of installment by EUR 70, down to EUR 285/month Mortgage loan in EUR Removal of the risk fee (EUR 90); Return of EUR 3,000; The monthly installment was reduced from EUR 350 down to EUR 260; Mortgage loan in EUR Interest rate reduction from 9.75% down to 5.75% p.a; Installment reduction from EUR 207 down to EUR 95; Reduction of principal by EUR 3,100 Personal loan with mortgage in EUR Removal of the management fee of EUR 20/month Reduction of principal by EUR 900 Interest rate reduction from 6.7% down to 5.85% p.a. Reduction of installment by EUR 35/month, down to EUR 270 Mortgage loan in EUR Writing off the overdue (by more than 90 days) installments of EUR 600 Interest rate reduction leading to a reduction of the monthly installment from EUR 200/month down to EUR 134/month Personal loan with mortgage in EUR 50% reduction of the management fee charged to the current principal of the loan of EUR 150/month Reduction of installment by EUR 75/month

  14. THANK YOU!

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