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Italy’s Antitrust Regulator Probes Credit Agricole Over Mortgage Promotion Practices

By  |  October 30, 2024

Italy’s competition authority, the AGCM, has initiated an investigation into French banking giant Credit Agricole, focusing on the transparency of its online mortgage simulations. The probe specifically scrutinizes the bank’s promotional approach to its “Greenback” mortgage product, especially how it was advertised through online simulators, according to MarketWatch.

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    The AGCM noted that Credit Agricole’s online mortgage simulators may have presented an incomplete picture of the annual percentage rate (APR) associated with the Greenback mortgage. Per MarketWatch, the regulator is assessing whether the simulation accurately accounted for the cost of a credit protection policy, which is a prerequisite for customers to receive a promotional discount on interest rates. The AGCM suspects that the simulator may have only included the insurance cost for the initial twelve months following the mortgage signing, omitting the full-term expense of the policy.

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    The authority expressed concern that by calculating only a portion of the insurance costs, the simulator may have presented an artificially low APR, potentially misleading customers regarding the true cost of the mortgage over time. This issue is particularly pertinent as the Greenback mortgage, marketed as an attractive financial product, could have appeared more favorable to consumers than it truly is under full-cost considerations.

    In addition, AGCM is examining whether Credit Agricole’s promotion of the Greenback mortgage on external comparison websites adequately disclosed the conditions tied to the offer. These websites are commonly used by consumers in Italy to compare loan offers from multiple banks, making transparency crucial. Per MarketWatch, the AGCM suspects that essential details about the insurance policy requirement, which directly impacts the mortgage’s overall cost, may not have been fully communicated on these platforms.

    AGCM’s inquiry involved coordinated action with Italian police, who carried out inspections at Credit Agricole’s Italian offices on Tuesday. The investigation underscores a broader focus by Italian regulators on financial transparency and consumer protection, particularly in the increasingly digitalized banking sector.

    Source: MarketWatch