ABDRC 2019 Activity Report and Achievements

PRESS CONFERENCE 30 January 2020

2019 Activity Report for ABDRC Amount of the benefits awarded further to conciliation Enlargement of ABDRC's scope to legal entity

WORK OF ABDRC IN 2019 - OBJECTIVES Providing more information to and raising awareness of consumers about the existence of ABDRC and the benefits of the services rendered by the Centre; Attracting increasingly more consumers involved in different disagreements with banks/NBFIs to ABDRC, so that they opt for ADR to the detriment of filing complaints to the National Authority for Consumer Protection, or bringing up legal actions; Streamlining the work stages and rendering more efficient the steps of ADR procedures with the support of a software used to manage documents, trader and conciliator feedback, and internal communication; Regaining the trust of consumers in financial- banking/non-banking institutions with an increasingly higher number of applications received, casefiles formed and resolved, and resolutions rendered, and a lower number of closed applications and reports.

EVOLUTION OF THE NUMBER OF APPLICATIONS 2016-2019 The compliant applications received in 2019 is approx. 65% vs. 2018. The number applications amicable settled directly by the parties, but after reported the case to ABDRC, has increased by 140% previous year. number of of (in 2019) having vs. the *Data available as at 31.12.2019

EVOLUTION OF CASEFILES & MEANS OF SETTLEMENT (2019) Since beginning of 2019, 440 with resolutions, while more than 70 concluded reports. As many as 130 casefiles were in progress in the end of 2019. the concluded casefiles with *Data available as at 31.12.2019

EVOLUTION OF APPLICATIONS IN 2019 - BANKS AND NBFIS *Data available as at 31.12.2019

EXAMPLES OF SOLUTIONS OBTAINED RON 298,000 written off for a consumer of Bucharest who is faced with a medical condition that requires treatment; All-time high in RON (2019) CHF 52,000 written off and loan closed; All-time high in CHF (2019) EUR 44,600 written off from the principal of a consumer of Maramure . In this social case, the bank wrote-off an amount almost equal to that initially granted as loan. Additionally, it divided the balance into instalments of approx. RON 1,000/month; All-time high in EUR (2019) The payment effort was relieved by approx. EUR 39,000 by writing off the management fee, and repayment of the entire financing fee. The same consumer was also written off EUR 18,000 from the principal under another loan agreement executed with different trader; All-time high in EUR (2018) A case resolved in only one day: Additionally, the parties dropped the pending lawsuit; Record settlement speed Payment agreement + resumption of the repayment schedule + suspension of forced execution. Case settled in forced execution stage

WORK OF ABDRC IN 2019 - FACT&FIGURES Percentage of applications closed Number of applications closed by banks in 2019: 540 applications 90 80 (of these, the banks could have entered conciliation as to 397 applications, but refused to do so for reasons that were assessed as unjustified); Number of applications closed for good reasons: 310 applications 80 70 60 60 45 50 40 31 30 20 (for deregistration from the Credit Office, applications concerning "First House" loans, the State premium, assigned claims, etc.); Average time required to resolve a casefile: 55 days instance, applications for 10 0 2016 2017 2018 2019 Evolution of applications closed by banks: 80% in 2016 60% in 2017 45% in 2018 31% in 2019 (under the Government Decision no. 38/2015, casefiles need to be resolved within 90 days );

WORK OF ABDRC IN 2019 - CONSUMER FEEDBACK The consumers seek, first of all, to have their bank/NBFI review their case and see that these are willing to provide them with more explanations about fuzzy details of their contracts/agreements, and are opened and transparent, even if the concessions these are willing to make under the conciliation procedures do not radically amended the terms thereof; The most frequent source of consumer irritation relates to closure of cases without a clear justification. Many of their claims are not of high amounts, but they expect that banks/NBFIs pay them the due attention, talk to them on an equal footing, via conciliator; The most frequent feedback that consumers submit to ABDRC is their satisfaction that an entity which hears their problems and seeks solutions to address them exists; While these may be the all-time highs in terms of amounts, the social cases continue to account only for a very low share of the total number of cases addressed via ABDRC. Recommendation: Medical cases are recommended to be supported with documents, and are not per se a condition for the bank accepting the application.

AMOUNT OF CONCILIATION BENEFITS Total amounts of the benefits awarded in conciliation (2016-2019): EUR 2.67 mil Average amount of benefits/casefile: EUR 2,150 2016-2017: EUR 0.4 mil 2018: EUR 1.014 mil 2019: EUR 1.255 mil Value bands for resolutions* (in EUR equivalent) % of resolutions 1 EUR 1,000 39% 1,000 EUR 5,000 43% 5,000 EUR 10,000 11% Above EUR 10,000 7% *Note: the decisions reviewed are from years 2018 2019

ENLARGEMENT OF ABDRC'S SCOPE IN 2020 Further to transposition by Romania of the Payment Services Directive/PSD2, the following laws were passed: Law no. 209/2019 on payment services Law no. 210/2019 on the issuing of electronic money Thus: both laws refer to ABDRC when they regulate the possibilities of addressing the problems that natural persons and legal entities encounter when accessing these services; both enlarge the ABDRC material jurisdiction to cover also for the legal entities that access the services regulated by the two laws; ABDRC put in place the operational flow for this category of potential customers.

ENLARGEMENT OF ABDRC'S SCOPE IN 2020 Examples of payment services* that can be covered by an application filed with ABDRC: 1. cash deposit/withdrawal (via ATMs) into/from a payment (banking) account 2. performance of payment operations, including fund transfers between bank accounts: a. direct debiting, including one-time direct debiting (for instance, scheduled utility, instalment, etc. payments); b. performance of payment operations using a payment (debit or credit) card, or a similar device (mobile phone). E.g.: payments at retailer POSs; c. credit transfers (amounts transferred between two accounts); 3. issuing of payment instruments, and/or accepting payment operations (WoP, cheques, drafts, promissory note, card, internet/phone/mobile/home banking); 4. payment initiation services (PISP - AMAZON); 5. account information services (AISP aggregate information about the amounts available in accounts opened with more banks). *Pursuant to the provisions of art. 7 of Law no. 209/2019

ENLARGEMENT OF ABDRC'S SCOPE IN 2020 The beneficiaries of these services have available the same means as consumers to approach ABDRC, namely: https://cereri.csalb.ro/; via email to office@csalb.ro; by mail/courier to the address of Bucharest, Sevastopol, nr. 24, 2nd floor; directly to the offices of ABDRC, using the specific forms provided in this regard; The procedures are available on the website www.csalb.ro, and please note that these are similar for the ADR procedures applied in case of natural persons; The fee charged for settlement of disputes by conciliation within ABDRC is of RON 1,986, shared equally by the two parties (RON 993 to the legal entity, and RON 993 to the financial and banking institution).

ENLARGEMENT OF ABDRC'S SCOPE IN 2020 The users/beneficiaries of payment/services may approach the following categories of providers of payment services: credit institutions as entities that raise deposits or other repayable funds from the public and grant loans in their own name (e.g.: Banks); issuers of electronic money (e.g.: ORANGE MONEY) electronic money means "electronically, including magnetically, stored monetary value as represented by a claim on the issuer issued on receipt of funds for the purpose of making payment transactions, and accepted by a natural or legal person other than the electronic money issuer ; it is NOT a virtual currency; institutions provided electronic money transfer postal services (e.g.: the Romanian Post); card issuers, mobile phoning operators providing also payment services, entities transferring money. (e.g.: MoneyGram, Western Union);

ENLARGEMENT OF ABDRC'S SCOPE IN 2020 As regards legal entities, the scope of ABDRC excludes the following: Loan agreements of corporate clients, irrespective of their capacity: borrowers, guarantor, personal guarantors (excluded under the Government Ordinance no. 38/2015); Currency exchange operations type cash-for-cash, when the funds are not kept in a payment account; Payment operations performed exclusively in cash by the payer to the payment beneficiary, without any intermediary intervention; Payment operations in connection with management of assets of the financial instruments type (e.g.: shares, bonds, Forex), including distribution of dividends, income or similar.

MILESTONES FOR 2020 Continuing with the ABDRC Roadshows across the country to raise awareness of the consumers and banking staff about ABDRC and the benefits of conciliation; Developing mechanisms of conciliation between legal entities and financial and banking institutions; Rendering more efficient the work of the Centre with the aid of the document management software ; Increasing the number of applications turned into casefiles that involve NBFIs; Reducing the number of unreasonably closed applications below 30% of the total number of applications filed by consumers; Fine-tuning consumers, conciliators, and banks/NBFIs within ABDRC. communication between