Consumer safeguards

• What they are
• Interested parties
• Strengths and drawbacks
• Expenses
• Underlying rules
• Pitfalls

What they are

If you want to report irregular or improper conduct on the part of a bank or other financial intermediary relating to banking products or services, there are several things you can do.

• You can make a complaint directly to the intermediary;
• You can use an alternative dispute resolution system;
• You can file a lawsuit.

All financial intermediaries must have a Complaints Office, which has to respond to customers within 60 days of receiving complaints about banking products and within 15 days for complaints about payment services. There are different timeframes for complaints about insurance products (45 days) and investment products (60 days). Information on contact details and how to submit a complaint is usually available on the intermediary's website.

If you don't receive an answer within the stipulated deadline, you can contact:

• one of the alternative dispute settlement systems provided for by law;
• the judicial authorities.

The Banking and Financial Ombudsman (Arbitro Bancario Finanziario - ABF) is an alternative system for settling disputes between intermediaries and customers. It has been operative since 2009 for disputes involving banking products and services (for example, current accounts, mortgages and personal loans). If the appeal falls within the jurisdiction of the ABF, it can be dealt with quickly and at a low cost (€20).

If you want to report irregular or improper conduct on the part of a bank or other financial intermediary, you can also involve the Bank of Italy by making a complaint. The complaints, which must state who the customer is, indicate the bank or banks involved and describe what happened clearly, are sent to the Bank of Italy, which does not intervene directly with a decision. Instead, it examines the complaints received and usually sends a copy to the intermediary concerned. It also invites the intermediary to send a prompt and thorough response to the customer. If the Bank of Italy has no competence to deal with a complaint received, it forwards the complaint to the competent authority, and informs the customer that it has done so. The complaints sent to the Bank are a source of information for its supervisory work.

Interested parties

Any customers who are not satisfied with their bank or who want to report irregular or improper conduct on the part of a bank or other financial intermediary.

Strengths and drawbacks

There is a proper system of safeguards for banks' customers to use, which consists of four connected parts. 

First of all, there are the rules that require banks on the one hand to provide customers with useful information that is as clear as possible and on the other to behave correctly towards customers. For example, banks are required to assist their customers, and must have a Complaints Office to help customers efficiently.

Of course, if there are rules then there also needs to be some kind of 'police force' to make sure they are respected, and this is the Bank of Italy's task through its supervisory work. If the Bank of Italy detects a small mistake in a bank's conduct that did not cause significant damage to the client, it asks the intermediary itself to take effective action to resolve the problem. If a mistake has caused damage to the customer, the Bank of Italy asks the intermediary to refund the customer directly. Finally, if the problem is even more serious, pervasive and deliberate, the Bank of Italy may impose a range of sanctions on the intermediary.

However, individual customers also need to be able to activate some defence mechanisms by themselves that can help them find a solution to their problems and this is where the possibility of contacting the ABF comes in.

In conclusion, it is important that customers have a better understanding of how markets and banking and financial products work. This is where financial education is useful and the Bank of Italy is not the only authority involved here. There are also other authorities in the Italian system: CONSOB, IVASS, COVIP and the AGCM, each one with its own field of competence.

Expenses

You can submit complaints free of charge and you don't need a lawyer to help you.

Filing an appeal with the ABF only costs €20, which covers the procedural costs.  If your appeal is upheld, even only partially, the intermediary will have to refund the €20.

Underlying rules

Sending a written complaint to the intermediary is important, because if you're not satisfied with the response or you don't receive one, you can then appeal to the ABF. Don't forget that an appeal can only include issues that were already set out in the previous complaint.

You can appeal to the ABF no later than 12 months after submitting your complaint to the intermediary. If 12 months have already elapsed you'll have to file a new complaint.

The ABF carries out its tasks and decides disputes as an independent and impartial body, assisted in its work by the Bank of Italy. The appeal is decided based exclusively on the documentation filed by the parties (claimant and intermediary); no legal assistance is required. For information on how the ABF system works and how to lodge an appeal, see the ABF's website.

The ABF's decisions are not legally binding, but if the intermediary does not comply with them, its non-compliance is made public.

Pitfalls

It may happen that a bank's customer asks the Bank of Italy to resolve their problem directly with the bank by deciding who is right and who is wrong. It is important to make it clear that when the Bank of Italy receives a complaint:

• it does not make any decision concerning the contractual relations between the intermediary and the customer (unlike the judicial authorities or the alternative dispute settlement systems like the ABF), or concerning the independent evaluations made by individual intermediaries, for example for granting a mortgage;
• it does not usually respond to complaints on issues already submitted to the judicial authorities or to the ABF;
• it does not disclose the results of any investigations carried out on intermediaries.