PRESS RELEASE

DEBT COLLECTION AND DEBT RESTRUCTURING: ANTITRUST SANCTIONS 4 COMPANIES FOR UNFAIR COMMERCIAL PRACTICES

Eurorec and Eurocredit intimidating consumers by sending judicial summons from courts based in other jurisdictions. The Agenzia Debiti company and B&P, alternatively, were promising debt restructuring at ridiculous rates and charging 390 euros for the delivery of the forms.

Consumers targeted by summons for debts presumably barred or induced to resolve their financial difficulties through a hypothetical debt restructuring, in exchange for a 390 euro payment, which actually only represented a first payment for delivery of the forms to fill out. The Antitrust Authority intervened by imposing fines totaling 350 thousand euros to sanction 4 different companies for unfair commercial practices.

AGGRESSIVE DEBT COLLECTION

The Authority concluded separate investigative proceedings for two companies (EUROREC (Agenzia Nazionale Cartolarizzazioni e Recupero Crediti Srl) and the individual company EUROCREDI) with a 100 thousand euro fine for each company.

As reconstructed by the Antitrust, several reports received from various consumer associations revealed that these two companies had been using law firms to send court summons to consumers issued by judges based in other jurisdictions, with the sole purpose being to intimidate and pressure them to pay the debts, presumably barred or of dubious collectability, acquired from a bankrupt telephone company. As revealed in the reports that came in, in fact, the two companies were trying to recover debts for invoices that had already been paid or that had not been paid because the telephone services were never activated, or for consumers who declared

that they had never been customers of that telephone company. The debts were presumably barred, however, and the summons sent to consumers had never even been entered into the action of the docket.

The conduct by these two companies was classified as aggressive commercial practices, in that their application was liable to condition consumers wrongly - the companies' activities led the recipients of the summons to believe that, in spite of the lack of grounds for the request, it might nevertheless be preferable to pay the contested sum right away rather than run the risk of judicial litigation, which in reality was non-existent.

DECEPTIVE PROMISES FOR DEBT RESTRUCTURING

“Reduce outstanding debts by up to 70%, including tax obligations." This is the promise used by Agenzia Debiti SpA and the B&P srl company (the call center manager hired to contact the users), both now in bankruptcy proceedings, to introduce themselves to consumers in financial difficulty by means of internet advertising, the press and sms.

Once initial contact had been made with the call center (whose number was posted in the same message), in reality, and in contrast to the advertised promise, consumers would find themselves being delivered a package at a cost of 390 euros, but simply containing the forms to fill out in order to grant permission to carry out any credit checks that might be necessary. In essence, the company hooked users into contacting the call center, which collected their personal data and various details about their outstanding debts with private banks or credit agencies and for taxes, and then sent the package and pocketed the sum of money up front.

The Antitrust's investigative findings and reports from consumer groups also revealed that Agenzia Debiti was not licensed to run a business nor had it submitted a SCIA (Certified Notice of Business Commencement) - in substance, it was not the regular agency it claimed to be.

After paying for the forms, furthermore, consumers who decided to engage these services were advised to 'pilot' their debt position by 'inflating' it, which would then induce the creditor to reduce the debt. Apart from the lawfulness of such practices, there was no mention whatsoever of the risk that the creditor could respond to such tactics by asking for bankruptcy or going after the debtor's estate. The sizeable charge for this consultation had to be paid immediately, and not through convenient installments, as advertised by the company, but with postdated checks or promissory notes.

Lastly, in regard to debts contracted with Equitalia and the tax authorities, the simple recommended solution for "resolving any debt problem" was "opposition to Equitalia and tax authority requests in order to reduce, suspend or set up a payment plan for tax demands." This goal is impossible, however, because for public debts and tax demands in particular there is very little room for negotiation and payment plans, both of which are bound by specific legal regulations.

For these commercial practices, Agenzia Debiti was fined 100 thousand euros and B&P was fined 50 thousand euros, figures which were reduced due to the bankruptcy of these companies, notwithstanding the seriousness of the unfair practices.

Rome – 27^th December 2012