Italian AGCM fines four banks for unfair commercial practices

  • 17 April 2020

ORX News story of the month: March 2020

Each month, we share a free operational risk loss event story from ORX News. The story is handpicked by the team as one of the most interesting stories reported by the service in the previous month. This story was published by the service in March 2020.

Italian AGCM fines four banks for unfair commercial practices

The Italian antitrust authority, Autorita’ Garante della Concorrenza e del Mercato (AGCM), has fined UniCredit, BNL, Intesa Sanpaolo, and UBI Banca a total of €20.8m for mis-selling insurance policies and current accounts when entering into mortgage or subrogation agreements.

The AGCM found that since at least July 2017, the banks had required customers entering into mortgage or subrogation agreements to purchase insurance policies, such as life or fire insurance, offered by the banks as conditions for the financing. The banks did not inform customers that they could choose a policy from another institution, and customers with insurance policies from other institutions were forced to buy a new policy with the banks and terminate their old policy. The AGCM found that employee sales incentives led to the aggressive sales tactics used by the firms.

The ACGM estimated that the forced sale of policies had cost customers a total of at least €241.5m per year and had earned the banks a total of at least €84m.

The AGCM also found that BNL and UniCredit had forced customers to open current accounts as a condition of the financing agreements. The banks imposed commission on instalment collections from other banks but not from their own current accounts, which limited customers’ ability to decide on whether to open a current account when entering into mortgage agreements.

UniCredit was fined €6.6m, BNL was fined €5.7m, Intesa Sanpaolo was fined €4.8m, and UBI Banca was fined €3.8m.

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Op risk losses categorised for easy analysis

Every single ORX News story is categorised to help you get the most from the data. The categories include the business line, event type, scenario category. All of this information makes it easier for you to use and analyse the loss events.

Extract of the data for this story from ORX News:

Business line: Retail Banking
Event type: Clients, Products & Business Practices
Loss amount: USD 7,276,198.50
Country: Italy
Scenario category: Retail Mis-selling

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