Dispute Settlement trough Banking Mediation

• Author: Lecturer Angelica Rosu, PhD
• Position: "Danubius" University of Galati

The systems through which cross-border financial transactions are being accomplished are much more complex than domestic funds transfer systems, because it involves one or more intermediate institutions, networks using different compensation from countries that have different currencies and even performed, including operations exchange.

The European Community, constantly seeking more efficient cross-border payments but also the consumer protection of these services, has perceived the need to establish minimum requirements and measures relating to cross-border credit transfers. Thus, these measures should ensure the existence of adequate and effective complaints and redress procedures for the settlement of disputes between an originator and his institution or between a beneficiary¹ and his institution in case of failure transfers. These schemes are essentially extrajudicial dispute resolution methods which should involve lower costs and greater confidence.

Growing demand for implementation of alternative dispute resolution mechanisms reflects, in fact, the general policy pursued by the European Union Member States and the European Free Trade Association²to ensure the same conditions for cross-border services and national services and cross-border investment incentives.

At the national level in the European Union Member States and the European Free Trade Association³, the provisions of Directive 97/5/EC of the European Parliament and Council on cross-border credit transfers were applied by the mandatory affiliation of credit institutions and other institutions⁴ who carried out cross-border credit transfers at least to one scheme for handling complaints and redress procedures, not excluding the possibility to participate in several schemes simultaneously.

In the process regarding the implementation in Romania of the provisions of art.10 of the Directive 97/5/EC has been adopted by the Government the Ordinance no. 6 / 2004 on cross-border credit transfers⁵, document that was recently repealed by the Emergency Ordinance no. 113/2009⁶.

The need for that last piece of legislation is required, since the transposition and implementation into the national law of the Directive 2007/64/EC on payment services in the internal market amending Directives 97/7/EC⁷, 2002/65/EC⁸, 2005/60/EC⁹ and 2006/48/EC¹⁰ and repealing Directive 97/5/EC must be realized until November 1, 2009¹¹.

Chapter IV of the Government Ordinance no. 6 / 2004, entitled "Final Provisions", provides that each institution must have appropriate procedures for resolving customer complaints in connection with the execution of a cross border institution or commitments in connection with such transfer.

Prior to adoption of the Government Ordinance no. 6 / 2004, in the legal doctrine¹² were proposed ways that lead to the harmonization of Romanian legislation with the communitarian acquis regarding the implementation of alternative means of settling disputes in the field of cross-border credit transfers. Thus, four models of schemes for handling complaints have been suggested: a first model considered persons nominated by the state to investigate, mediate and conciliate in complaints from consumers - „Mediators/Ombudsman Schemes"¹³; a second model concerned the establishment of committees of consumer complaints (decisions will be regarded as recommendations, and committees were to be financed exclusively from public funds)¹⁴; the third model concerned the resolution of consumer complaints by the institutions established under field supervisors¹⁵; the fourth model was represented by the establishment of commissions of arbitration for consumers to act on their status, their decisions being binding.

The author then quoted stressed that the existence of a single institution to resolve all disputes between consumers and providers of financial intermediation services would be particularly beneficial for Romanian banking system and it can be a solution in line with current developments in Europe. It was considered that a viable model would be the resolution of consumer's disputes within organized structures inside of the National Bank of Romania as the banking supervisory authority¹⁶.

The solution was acquired by the Romanian legislature, both in the previous legislation (Ordinance no. 6/2004, dealing with the fact that, later than three months to register a complaint, the institution has not taken any step to resolve complainant, has failed its amicable settlement or no answer to the complaint lodged by customer) and the current regulator, respectively the Emergency Ordinance no. 113/2009.

This document states that "the National Bank of Romania ensures the application of extrajudicial, adequate and effective redress procedures for complaints brought before it by the payment service users who consider themselves injured by payment service providers that operate in the territory Romania. Payment service users may resort to these procedures to resolve complaints on a voluntary basis "(article 179).

To this end, within the structure of the National Bank „it will be created a specialized department that will provide mediation of disputes arising between classes of service providers as stated in art. 2¹⁷ and the payment service as stated in the regulations issued by the National Bank"¹⁸.

We must point out however that such a department does not exclude the possibility for stakeholders to address the National Authority for Consumer Protection or to the court.

To ensure compliance with that legislation (art. 178 of the Emergency Ordinance no. 113/2009), payment service providers, consumers, other stakeholders, including consumer associations can either announce their National Authority for Consumer Protection on the violation by payment service providers to the provisions of Titles III and IV of this emergency ordinance or to initiate legal action against payment service providers which violated the provisions of that legislation.

The National Authority for Consumer Protection shall inform, where appropriate, the applicant, in reply to it, about the existence of extrajudicial procedures for dispute resolution. To resolve any disputes amicably and without prejudice to the right of consumers to initiate legal action against payment service providers which violated the provisions of Emergency Ordinance no. 113/2009 and their right to notify the National Authority for Consumer Protection, consumers can call on Extrajudicial dispute resolution procedures.

The European Commission is behind the organization of two...