Financiarul

The cost of going to courts in Romania to defend consumer rights is higher than in many European Union member states (although not as high as in the United Kingdom) in the same year; the cost for Romania is estimated at 20 percent of the amount claimed in the same year, compared with only 10 percent in Poland and 13 percent in Hungary. It is estimated that Romanian court procedures take, on average, about 18 months until a final decision at first instance is rendered.

The exhaustion of all possible appeals can then add significantly to this time, reads a recent World Bank report on Romania. The World Bank (WB) recommends in its report called ‘ROMANIA: Diagnostic Review of Consumer Protection and Financial Literacy,’ among other things, that complaint statistics should be published so that consumer can readily access the information of which institutions have received the most customer complaints, and financial supervisory bodies, including the National Securities Commission (CNVM) should play a key role in alerting consumer to illegal practices in financial services.

‘Statistical information on complaints, including the final results of each complaint, would provide an invaluable data-base upon which policy can be developed. The information on complaints, whether submitted to the financial institutions or government agencies, should be consolidated and published at least annually by the National Consumer Protection Authority.

Publication of complaint statistics would allow consumers to easily learn which financial institutions have received the most complaints – and the final disposition of the complaints. Complaints also provide a valuable repository of underlying weaknesses of specific financial institutions – and warning signals about possible systemic weaknesses in the financial system. In addition, complaints can provide an early warning system of possible frauds in the financial sector,’ reads the report.

‘Where complaints are not settled satisfactorily, going to court can be a slow and expensive option for consumers,’ reveals the report, drawn up under the coordination of Sue Rutledge, World Bank’s Regional Consumer Protection Coordinator.
‘Some internal mechanisms are in place for costumers to lodge complaints with financial institutions, but they do not apply to all types of financial institutions.

Although most banks have internal procedures for dealing with customer complaints, but, generally speaking, they are neither published nor well publicised. In the securities sector, intermediaries are required to establish internal complaint procedures to handle customer complaints. Securities firms are obliged to establish, implement and maintain effective and transparent procedures for the reasonable and prompt handling of complaints received from retail clients.

They must have a designated compliance officer approved by the CNVM and the officer is obliged to keep a register of all complaints. However, not all financial institutions are obliged to maintain a process by which customers can lodge complaints,’ the report finds.