In its meeting on 31 October 2017, the Italian Competition Authority (“ICA”) approved the closing of three investigative proceedings for unfair commercial practices by sanctioning UniCredit S.p.A. (5 million euro), Banca Nazionale del Lavoro S.p.A. (4 million euro) and Intesa San Paolo S.p.A. (2 million euro) for a total amount of 11 million euro.

The three banks engaged in aggressive commercial conduct, in violation of Articles 24 and 25 of the Consumer Code, consisting in the practice of compound interest, i.e. debiting consumers with interest calculated on the debit interest accrued.

Such conduct was carried out within an evolving regulatory framework that currently allows compound interest to be only and exclusively applied with prior authorisation from the customer. The investigations revealed that the three banks implemented various aggressive strategies to acquire their customers’ authorisations to debit their accounts with compound interest, on the assumption that charging debt interest on an account was the ordinary modus operandi and without considering the consequences of this choice in terms of calculating interest on debit interest.

Various actions were implemented to acquire said authorisations from customers who had not yet made their choice, through solicitations and monitoring by the network and the internal functions/structures involved by means of regular postal service, physical branches and the internet. This was done by using pre-filled personalised communications, emails and pop-ups on the homepage of customer areas aimed at activating the online procedures authorising debit interest that did not allow consumers to expressly deny said authorisation.

In carrying out these policies, the banks made sure to emphasise only the possible negative consequences of customers not granting authorisation, characterising the effects of non-payment of interest in terms of default interest and reporting bad payers to financial and credit databases, while not mentioning the consequences of the authorisation to apply compound interest.

Therefore, the ICA deemed that the methods used by the banks were unfair, such that, the way and insistence with which the authorisations were requested unduly influenced consumers and caused them to make decisions they would not have considered otherwise on the application of compound interest on their accounts.

Inspections were carried out during the preliminary investigations with the help of the Special Antitrust Unit of Guardia di Finanza.

Rome, 17 November 2017