In the spring of 2013, political scientist Vladimir Bortun conducted several interviews with clients of banks which gave out mortgage loans. The clients talk about their relationship with the banks, about the banks’ unilateral decisions and abusive clauses.
How did your relationship with BCR begin?
Well, I decided to stop paying rent and move with the family, we couldn’t fit in a one-bedroom flat anymore. And we thought we’d take out a loan.
What year was this?
Late 2007, early 2008. I went to several banks, I asked for several offers, and in the end I thought BCR gave me the best options. One thing did puzzle me though. During the first year, I was supposed to pay fixed interest, after that it became variable, according to the reference posted in BCR subsidiaries. And I didn’t know how this variable interest worked, so I asked them about it, but they answered in ways I didn’t really understand. I asked the gentleman again and again, politely, how this mechanism worked. He couldn’t explain it. He just couldn’t, it’s the fairest way to say it. I don’t know if he meant not to.
What exactly did you ask him?
I asked him about what kind of events could lead to a steep increase in this variable interest, to the point where I couldn’t pay it anymore. What could, for instance, increase my then-interest of 4.8% to, say, 7%? The man told me that probably only a war could do that. In that case, I accepted. Now I’m paying 11% and there’s no war.
And how did things progress after you agreed to the loan?
I paid my installments on time the first year, then they jumped from 200 euro to 460. And I told them there must some kind of mistake, No mistake, they said, the variable interest went up.
What was the reason for that?
Initially, I thought that the variable interest had to be paid according to the ROBOR or EURIBOR indexes (for loans in lei and euro respectively), which are set outside the bank which lends you the money. Everybody thought so. But I paid an interest rate set by BCR, which means that if the interest rate rises, I’m paying for their incompetence – which is fine by me, up to a point – but I also have to pay for the fraud.
You’ve seen the stories in the media lately, about frauds in banks. That money disappeared from the banks and those losses are put on my tab as well, in the installment.
What did you do when the monthly installment doubled?
In 2010, a couple of us in this situation gathered online and started talking, We decided to sue the bank.
How many of you were there initially?
Around 5-600. As the trial went on, we got fewer and fewer, because the bank offered all kinds of deals to people bypassing the lawyer.
What kind of deals?
I don’t really know, they’re confidential, but it’s rumored they contain a preferential interest rate. It’s still variable, only lower.
How many of you are left?
327, split in two groups, G1 and G2.
What happened next?
Before suing the bank, our lawyer sent them a letter asking them to negotiate, to see if we could settle this without unnecessary expenses. I had high hopes, but it turned out the bank did not cooperate.
Did you still have faith in the bank at that point?
My faith in the bank had started to fade earlier, when another BCr client who sued them separately – and won – made a graphic showing their variable interest rates remained high even when the EURBOR dropped. But my confidence was dead and buried in the courtroom, when I saw how the bank defended itself.
How did they defend themselves?
I can tell you what others told me, I don’t want to wake up in the morning with a law firm suing me. One guy who studied for a year so he could defend himself told me that at the trial, one of the counselor’s arguments was that oxen are tied to the fence with rope, people are tied with their signatures.
When did your trial start?
We sued on October 2010, but the issue only went to court in spring 2011. There was a lot of stalling, obviously. I was there, I saw them do it.
Why are they stalling?
The loan keeps rolling, they cash in. It suits them perfectly. Not to mention some drop their lawsuits.
What did you accuse the bank of, precisely?
We asked the court to attest to the abusive nature of the following clauses: the calculation of the variable interest, the loan commission, the maintenance commission, the risk commission – all masked interest, really – and the additional collateral commission. And in case they were found to be null and void, we asked to have them removed from our contracts.
What is an abusive clause?
There are two instances when a contract clause can be considered abusive: if it has not been negotiated and if it created, in bad faith, a major imbalance between the two parties.
And how did the interest clause fit these criteria?
First of all, it was not negotiated; it was put in the initial contract. Secondly, the fact that the calculating mechanism for the variable interest was purely arbitrary and the clients could not estimate its evolution denotes bad faith. Thirdly, the fact that the bank increased the interest when the EURIBOR index increased, but did not decrease it when EURIBOR decreased created a major imbalance.
What did the court decide?
The first ruling came in March 2012 and it nullified the maintenance commission. I forgot what it said about the rest, but they were dismissed anyway.
What came next?
I told you we were split into G1 and G2 groups, the same lawyer, different lawsuits. I’m in G1. The ones in G2 managed to enforce the judgment on the bank and make them pay back the maintenance commission, around 900.000 lei.
So it went all the way to judgment enforcement?
Yes. There are people who have won irrevocable rulings in some cases, in others the judge said: “Take this crap out of the contracts, have you no shame?” and the bank replied: “And what will we replace it with? Teach us!” There is a colleague of ours who won on all counts, both the commissions and the interest rate had to be removed from the contract. They weren’t, and he said he would stop paying the installments and even relinquish Romanian citizenship altogether.
You said that G2 got their money back, but what about G1?
We moved a bit slower, it dragged on and on, and then there was the appeal
What happened then?
We appealed, and so did the bank. They won it in February. It’s very interesting. The appeal only took one day to judge, while the entire lawsuit up to that point had dragged on for two years! Besides, there was also the Munteanu case.
What about it?
Let’s say you and I have the same contract, only the interest rate is different. We have the same lawyer, we were the clients of the same bank, we go to the same appellate court in Bucharest – you win everything, I lose everything!
With the same documents and the same plea?
Yes, everything is the same, but it’s a different judge and a different verdict. In the Munteanus case, the judge not only agreed to the demands of the plaintiff, but added some of his own. It would be interesting for the banks to read that ruling, but I’m guessing they’re too busy.
What’s left after the appellate court’s decision in February 2013?
We’re gonna go all the way, that’s clear for everyone.
Meaning we’ll go to the High Court of Justice, it’s the highest you can go in Romania, legally. What I would like is for us to win at the High Court, and here’s why: if we win here, the ones responsible get to pay. If we don’t, these abusive clauses become the norm and they’re setting a powerful precedent which they can use to bash any other complaints brought against the banks. If we go to the EHCR (European Court of Human Rights) and win there, my daughter will pay for all this mess, you will pay, everyone else will pay. It’s not fair, not fair at all. That’s why I wanna push this now.
Now, after your experience with the courts, do you think there are other ways of fighting the banks?
Yes, I do. I’m paying my installments with a 29-day delay. It’s not good for them, because they work with risks, and when I don’t pay on time, it’s increasing their risk. But other colleagues stopped paying altogether. I don’t see why they should, they have an irrevocable court ruling forcing the banks to remove the clauses.
In case you decide to stop paying also, how could they make you pay? Enforce judgment?
Let them. The judge might make fun of them. It’s happened before: people stopped paying their installments and until this whole abusive clauses issue is settled, they can’t really be forced to pay.
How did you perceive the way your situation has been depicted in the media?
Somebody handling media budgets told me we didn’t stand much of a chance, because they were the largest media buyers. But so far, everyone in the media I’ve talked to has been on our side. And the situation has been depicted fairly.
What do you think the authorities should be doing?
First of all, there’s the National Bank (BNR). No mortgage loan in Romania can be signed by a client until the National Bank has approved it. And the one’s we got, they were approved…Anyone can make mistakes, and BNR does have a lot of other work on its hands, it shouldn’t focus mainly on this. But once it’s made, once the situation becomes this severe, you start doing something. I wish they had more guts, I wish they made their presence felt, I wish they would let us know they know what this is about and they’re watching over things. Second of all, there’s the ANPC (Consumer Protection Bureau), who made a lot of noise, but accomplished little. Lately however, things have been moving there as well, the people there know a bit more what to do.