The investment mission of eToro Europe has been disrupted as the Italian Competition Authority (AGCM) imposed a hefty fine of 1.3 million euros. According to AGCM’s investigation, eToro Europe misled customers about the pricing of its services/
In an emailed statement to Reuters, eToro expressed their firm belief in consumer protection and scrutiny of the AGCM’ decision. “We are reviewing the decision by AGCM in full and we are considering our options”, the company stated.
The alleged violation of the consumer code by eToro Europe was a lack of disclosure of the monetary terms and technical details of their products and services. As a result, customers were found to make decisions that they wouldn’t have otherwise made. This included the risks of exchange rates and other limits that came with the products, which were not discussed in the trading platform’s website.
The Italian authorities also mentioned the zero-fee service of eToro that was advertised for their investors. In contrast to the promised service, the users actually had to pay for various costs such as exchange rates and transfer fees to other brokerage firms.
The fine serves as an impediment to the company’s plan to expand their services and increase its market share. eToro had signed deals with several football clubs in the United Kingdom, such as Arsenal, Crystal Palace, Everton and West Ham, to promote their brand.
“This launch is another example of eToro providing clients with the tools to meet their investment needs. By further opening up markets, more people will now have access to services which were previously limited to a few,” said Dan Moczulski, UK’s Managing Director of eToro.
Similarly, AGCM has expressed its dissatisfaction over the misleading services. “The information on the company’s website suggests that consumers can trade shares with no commission charged on their transactions but does not state that there are other costs”, said the Italian Competition Authority, reported Reuters.
The fine imposed on eToro Europe is one of the largest of its kind in the investment financial sector of Italy. It is a significant reminder to all market leaders of the importance of providing accurate pricing information for consumer’s protection. Though eToro Europe is reviewing their options, the authority continues to remain firm on providing transparent information to their customers.