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Irregular bank credit: the bank removes it and then the bank returns it

Recently updated on 14 Jun 2021

5 Jul 2017 - Civil Law - Min Read 3 min
Irregular bank credit: the bank removes it and then the bank returns it

Irregular bank credit

The phenomenon of irregular bank credit is more widespread than you might think. What to do to make back the excess money paid to the bank? First of all you must learn to read documents and find out if there are any hidden traps.

Too many complaints to the bank arbitrator, too many dissatisfied clients, too many doubts. Because of this, Bankitalia has deployed its inspectors and has confirmed that Italian current account holders often find themselves in debt.

Between 2015 and 2016, unhappy current-account holders have levelled a number of complaints at Bankitalia or the Banking Arbitrator. More than a thousand requests per month, a large figure, which demonstrate the extent not just a problem for the banks but also for an ever-more knowledgeable and combative client.

The costs of irregular credit

The phenomenon of “irregular credit” is a problem that accounts for one hundred million euros per year, which is more or less how much the banks have been forced to give back after Bankitalia’s analysis.

Behind every loan and transfer, there could be a hidden glitch, which obviously is always to the detriment of families and businesses, never of banks.

Banks manage to raise prices thanks to contracts that are drafted using too much jargon and terms that the average user cannot be expected to know. This is not to mention the lack of transparency.

In the transposition between verbal and written agreements, the client may not be informed of important details, which are then the things that make prices go up.

To reach a fair, reasonable refund request, correct information must be used.

To do this, copies of every single bank document would have to be kept and missing documents requested from a credit institution.

It is important to know that the Consolidated Banking Act makes it clear that the client, if they so wish, has the right to receive “copies of the documentation pertaining to any single operation carried out in the last ten years.

Compound interest and usury banking

Two phenomena sadly known to the Italian courts are anatocism and bank usury. 

Anatocism, or compound interest, is the calculation of interest on interest with a consequent uncontrollable increase in debt. Italian law legislates for this phenomenon in article 1283 of the Civil Code. One example of compound interest can be seen in the supply of loans.

The classic monthly payment is calculated by summing up financial capital and interest. In case of delays, and therefore of default interest, the latter should be calculated by fully writing off the part of the payment composed of interest. If not, there is anatocism (ruling from the Court of Appeal number 2593 of the 22th of February 2003).

Unlike anatocism, which, if verified, is resolved with the return of “ill-gotten gains”, usury banking is an illegal practice that is sanctioned against. It is legislated by Paragraph 644 of the Penal Code and by law number 108 of the 7th of March 1996. The settlement of a higher interest rate than the threshold rate fixed quarterly by the Treasury is established, in accord with the Banca d’Italia and Italian Exchange Office.

Convictions, for cases of usury banking, are the order of the day. With ruling number 122 of the 27 February 2017, the judges have inflicted on the Bank the return of what was wrongfully taken. This means a total of €39,032, plus the writing off of all interest for usury.

You can get your money back

You have the certainty of being able to get your money back if it can be proven that there is inconsistency between the conditions advertised and those applied, if unilateral changes to contracts occur (on the part of the bank) and there has not been adequate communication, or if there have been excessive charges for overdrafts. These are at least more common cases.

In fact, if you doubt that charges contracted with banks and holding companies are excessive, it is always advisable to turn to specialists. Our lawyers command the necessary capabilities for evaluating the situation and understand if you have been the victim of irregular bank affairs, and as a consequence will manage to find an adequate case-by-case solution.

To speak to a lawyer from the firm, please contact us here.

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Calogero Boccadutri

Calogero Boccadutri is the Managing Partner of Boccadutri International Law Firm. He has trial experience in Forex, Personal Injury and Administrative litigation.

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