Iaşi Residents File Leading Number Of Complaints Against Banks

Doru Mocanu,Iaşi

Over 110 residents of Iasi County have filed complaints against banks with the Iasi County Consumer Protection Commissioner"s Office (CJPC) in the last few months, according to Coordinating Director Ioan Tonel Cazacu. With this number of complaints, the residents of Iasi County are among Romania"s most displeased citizens when it comes to the quality of banking services. Nevertheless, only seven complaints have been resolved by the Consumer Protection Office.

The specific contractual clauses imposed by the banks and the consumers" lack of information have led to situations where the authorities cannot do anything against the bank, despite groundless increases in interest rates and fees. "Over the past few months, we have received over 110 complaints against various banks in the county. Unfortunately, less than 10% of them could be resolved with penalties against the respective bank. We could only give seven fines, because all the other contracts were legal. This happens because consumers are not aware of their rights and often do not read the loan agreements before signing them. It is very important to carefully read all clauses before signing," Ioan Tonel Cazacu added.

Specifically, the Iasi County Consumer Protection Commissioner"s Office gave fines in the amount of 40,000 RON. "The banks in question paid without dispute, practically admitting their fault. Iasi is one of the few counties in Romania that has managed to collect fines from banks," Cazacu stressed. Among the subjects of the complaints filed by disgruntled customers is that banks increase the interest rate groundlessly. According to the law, each customer must be notified 30 days in advance of any change in the interest rate and has 15 days to take the steps they deem fit, including an early repayment of the loan.

"The big problem is that the people who need a loan do not have the option to negotiate their contract. They have to accept the rules imposed by the bankers. We are fighting a Behemoth when it comes to banks. Banks have no respect for consumers. They are a state within a state. A serious bank charges completely different interest rates. However, the Romanian banking system has the highest rates, two times as much as they are in the European Union," added CJPC Iasi Coordinating Director Ioan Tonel Cazacu.

The actual amount of money disbursed by the bank to a loan applicant is another issue raised in the complaints filed in Iasi County. As an example, a customer who signs for a 50,000 EUR loan will only receive 47-48,000 EUR, as the bank has already retained various fees. According to CJPC - Iasi, such problems are not specific to small banks, but to the large ones. One of the banks to have received a fine from the Consumer Protection Office is Banca Comerciala Romana (BCR). The bank contested the fine but, as the fault is obvious, the CJPC Iasi could achieve their first court victory against a bank this Autumn.

"The fault was obvious in this case. We gave the bank a fine of 10,000 RON for not observing the provisions related to modifying the interest rate. The customer was not notified 30 days before the change came into effect. The first court hearing is scheduled for September," Cazacu said. However, the reason stated by the bank upon contesting the fine is interesting, to say the least: "The bank says they should not be fined because they, as a branch, are not a legal entity and that the fine should be given to the head office in Bucharest. It is not possible to have a contract signed between two entities and a third entity liable for faults," Cazacu added.

In his opinion, one solution to avoid problems of this nature would be to amend the legal framework on banking. However, this would only be possible if the people who had such problems filed formal complaints. "The more complaints we manage to resolve, the more confidence the consumers will have in us. I am sure that there are many more people out there who are entitled to file a justified complaint based on their contract, but they are not coming to us," Ioan Tonel Cazacu added.