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HOME LOAN PORTABILITY: 23 BANKS FINED FOR IMPROPER COMMERCIAL PRACTICES


PRESS RELEASE



PRESS RELEASE

HOME LOAN PORTABILITY: ANTITRUST AUTHORITY FINES 23 BANKS OVER IMPROPER COMMERCIAL PRACTICES

Fines amount to a total of Euro 9,680,000. In some cases, the banks encouraged customers to choose the more expensive replacement option. In other cases, they levied charges that are not provided for by law. Some banks did both, to the detriment of consumers. The obligation to exercise professional diligence, as stipulated in the Consumer Code, was violated by provision of incomplete and inexact information.

The Italian Competition Authority, at its meeting on 7 August 2008, decided to levy fines on 23 banks for improper commercial practices relating to the free portability of home loans. Investigations were launched on 24 April and 5 and 9 May 2008 following a complaint lodged by the Altroconsumo association and other individual consumer complaints, some of which were received by way of the Authority's Call Center, drawing attention to the fact that many banks were not applying the rules regarding free portability of home loans  (Decree Law no. 7 of 31 January 2007 as amended by Law no. 40 of 2 April 2007 and Law no. 244 of 24 December 2007).

In the Authority's view, the banks investigated, by way of different forms of conduct analysed in detail in the individual findings and fined individually according to the type and seriousness of the violation ascertained, its duration and the size of the bank, refused or at least hindered free portability (substitution) of mortgages  by customers as the law provides, thus not fulfilling their obligation to exercise professional diligence; they also provided incomplete or incorrect information to customers.

The improper commercial practices established by the Authority have to do with:

CREATION OF A NEW HOME LOAN INSTEAD OF SIMPLE SUBSTITUTION

The Authority found that Intesa Sanpaolo, BNL, Deutsche Bank, Banca Popolare di Sondrio, Banca Popolare di Vicenza and its subsidiary Banca Nuova, as well as Banca Popolare di Bergamo, Banco di Brescia, Banca Regionale Europea, Banca Popolare Commercio e Industria, belonging to theUBI Banca Group, over various time periods observed in the different individual investigations, had proposed that customers take the more expensive route of replacing their home loans. Thus, by way of the steps needed  for replacing the home loan (repayment of the loan/setting up of a new loan, discharge of the mortgage/registration of a new mortgage), the banks in question transformed what the law intended to be free into an expensive exercise.

SUBSTITUTION AVAILABLE BUT AT CONSUMER'S EXPENSE

Based on the Authority's investigations, Monte dei Paschi di Siena, Banca Antonveneta , Banca Carige, Banca Sella, Credito Artigiano, Credem and Bipop Carire, belonging to the Unicredit Group, and Banca Popolare di Verona, San Geminiano e San Prospero, and Banca Popolare di Lodi, belonging to the Banco Popolare Group, activated home loan portability but, in differing degrees, imposed charges on customers which are not stipulated in the law.

REPLACEMENT OF HOME LOAN INSTEAD OF SUBSTITUTION AND SUBSTITUTION SUBJECT TO FEES

The Authority found that Unicredit Banca, Banco di Sicilia and Unicredit Banca di Roma, belonging to the Unicredit Group, and Banca Popolare di Milano, at first did not offer substitution of terms but only the complete replacement of home loans. Only subsequently did they activate substitutions but, in varying degrees, levied charges on customers which are not allowed.

In the Authority's view, the types of conduct observed do not comply with the duty to exercise professional diligence as stipulated by the Consumer Code.

Furthermore, the above banks violated their duty to provide correct information as per the Consumer Code, proposing in a misleading manner the total replacement of the home loan as the only or preferable solution offered to the consumer by the market and the law or, in the case where charges were made for substituting terms,presenting current regulations in either a defective or misleading manner.


TABLE OF FINES

Bank
Fine
Intesa Sanpaolo
€ 480,000
BNL
€ 450,000
Deutsche Bank
€ 500,000
Banca Popolare di Sondrio
€ 410,000
Banca Popolare di Bergamo (UBI Banca Group )
€ 450,000
Banco di Brescia (UBI Banca Group )
€ 450,000
Banca Regionale Europea (UBI Banca Group )
€ 450,000
Banca Popolare Commercio e Industria (UBI Banca Group)
€ 450,000
Banca Popolare di Vicenza
€ 440,000
Banca Nuova (Banca Popolare di Vicenza Group )
€ 440,000
Monte dei Paschi di Siena
€ 350,000
Banca Antonveneta
€ 460,000
Banca Carige
€ 420,000
Banca Sella
€ 300,000
Banca Popolare di Milano
€ 420,000
Credito Artigiano
€ 250,000
Credem
€ 420,000
Banca Popolare di Verona, San Geminiano e San Prospero (Banco Popolare Group )
€ 320,000
Banca Popolare di Lodi (Banco Popolare Group )
€ 350,000
Unicredit Banca (Unicredit Group)
€ 500,000
Unicredit Banca di Roma (Unicredit Group)
€ 500,000
Banco di Sicilia (Unicredit Group)
€ 450,000
Bipop Carire (Unicredit Group)
€ 420,000
Total
€ 9,680,000


Rome, 8 August 2008