Banks or non-bank financial institutions and their customers often have disagreements or disputes over certain procedures, fees or other operations, and until recently, these types of issues were very difficult to resolve because it could take years in the judicial courts. Now, customers and banks or non-bank financial institutions can more easily resolve their disputes with the help of the Centre for Alternative Dispute Resolution in Banking (CSALB).
BR spoke to Alexandru Paunescu, member in the Steering Board of CSALB, about the ways the Centre helps both customers and banks resolve their disputes more easily than going through the judiciary system, the procedures involved and the results the Centre has had so far.
- What kinds of problems can we solve with the help of CSALB?
The Centre for the Alternative Dispute Resolution in Banking aims to resolve disputes between banks or non-bank financial institutions and consumers in an amicable, balanced and timely manner. Procedures are free of charge for consumers and are conducted outside the judicial courts. Consumers can turn to CSALB for any type of problem they have in their relationship with banks or non-bank financial institutions. For example, in the first trimester of this year, most claims were related to issues regarding loans, and a smaller part of claims were related to misunderstandings about bank deposits, current accounts, bank transfers or leasing. The most common claims from consumers are related to the reducing loan balances, the elimination of fees and returning the money paid for such fees throughout the years, the elimination certain contractual clauses, issues with foreclosures, recalculating and decreasing interest rates, rescheduling or reorganising loans, returning money or removals from the loan office.
- What are the procedures used for dispute resolution?
CSALB manges the infrastructure necessary for alternative dispute resolution thorugh two types of procedures, namely conciliation (a procedure that ends in a proposed solution) or arbitration (a procedure that ends with an imposed solution). The major difference between the two is that, in the case of arbitration, the procedure ends in a solution that is mandatory for both parties, while in the case of conciliation the parties can accept/negotiate/refuse the solution for up to 15 days after the conciliator communicates it. These procedures are optional, voluntary, and separate from the procedures carried out in the courts, and they are free of charge for the consumer.
- How long does dispute resolution usually take?
Unlike in court, where dispute resolution can take several years, CSALB’s alternative dispute resolution has to be completed in a maximum of 90 days, and the average duration is around 50 days. The record at CSALB is a resolution that was done in a single day. The time it takes for a solution to be given depends on the complexity of the case and the availability of the parties. Furthermore, each case is analysed and settled individually, depending on its particularities. In the first three months of this year, of the total of 175 claims, 74 have already been favourably settled, meaning that the parties have come to an agreement after negotiations. Anothe r 95 cases are now in various stages of resolution.
- Where does the funding come from for these services?
The financing for the Centre is covered by contributions from credit institutions and non-bank financial instituions, accroding to European recommendations. What is extremely important is the fact that consumers do not have to pay for resolution. If they accept a dispute resolution through CSALB, banks of non-bank financial institutions have to pay RON 993 to the Centre, of which Ron 675 is the net retainer of the conciliator, and the rest represents taxes that have to be paid to the state.
- What type of disputes are the most frequent?
In the first quarter of this year, most claims were related to contracted loans, as we explained above. 90 percent of the claims were related to issues with loans, while the other 10 percent were about misunderstandings regarding bank deposits, current accuonts, bank transfers or leasing.
- Can the clients choose their conciliator or is the case assigned automatically?
In the case of conciliation, the conciliator is assigned randomly. In case he is not accepted by the parties, another person is assigned from the Conciliator List. In the case of arbitration, the parties choose their arbitrator(s) from CSALB’s Arbitrator List. Conciliators are people with legal or economic backgrounds in the financial-banking sector, with at least 10 years of experience and a good professional reputation.
- What can consumers do if they don’t agree with the resolution or if the bank rejects it?
For conciliation, the parties have 15 days to accept/reject the proposed resolution, and in they can still carry out negotiation in this time frame. At the same time, the parties can withdraw form the procedures at any time. In case a dispute could not be resolved, the parties can turn to the courts. However, in the case of arbitration, the parties cannot withdraw after the Arbitral Tribunal is established, and the resolution is mandatory for both parties.
- What are the documents required for the procedures to be started?
The way consumers can benefit from CSALB’s services is very simple. Consumers need to fill out a request (found on the Centre’s website), which contains the consumer’s contact details and the specifics of the problem they encountered with the bank of the non-bank financial institution, as well as documents to support the request: the banking contract (loan/current account/card, etc.) and/or warranty contracts, additional acts, bank statements, reimbursement graphics, etc. All this information can be sent via e-mail or posted to the CSALB, therefore the consumer does not need to travel to the Centre. In the first quarter of 2018, of the 310 total valid requests received by CSALB, 85 percent were sent via e-mail and only 15 percent by mail or submitted at the Centre.
- How many disputes does CSALB resolve every year?
In 2017, the first full operational year for CSALB, there were 214 cases, almost five times more than in 2016, and the first quarter of 2018 has confirmed the fact that alternative dispute resolution is becoming more and more attractive for both consumers and banks. In the first three months of this year we had 175 cases – a number almost 10 times higher than in the same period of last year.
For this year we expect people to turn to alternative dispute resolution more and more frequently, and the total number of cases should reach 700-800. Ever since the last quarter of last year we’ve been seeing that banks have been more open towards conciliation procedures, and the number of dismissed requests has dropped to around 25 percent of the number of eligible requests.
How many conciliators do you currently have?
Dispute resolution is done by members of the Conciliators’ Body. Currently, CSALB is collaborating with 17 conciliators. They are independend in relation to the two parties in the dispute, and each party has to accept them. Conciliators do not get a salary from CSALB, instead they are collaborators, and their retainers are paid by the Centre for each case they complete.