The Competition and Market Authority (Antitrust) recently launched an investigation into Crédit Agricole for irregular mortgagesspecifically regarding the promotion practices of the “Crédit Agricole Greenback” mortgage. In particular, the Antitrust disputes that the cost simulations presented for this mortgage fail to include in the APR (Global Effective Annual Rate) the total cost of the credit protection policy, an essential requirement to access the promotional discount on the interest rate . This policy is in fact mandatory in order to take advantage of the promotional advantages, but the cost indicated is limited to the first twelve months, creating possible misunderstandings about the actual costs.
Furthermore, Crédit Agricole advertised the offer via websites mortgage comparisonwhich do not adequately explain the conditions necessary to benefit from the interest rate discount. These conditions include, for example, the stipulation of a credit protection policy (CPI) and the purchase of a property with an A or B energy class, which allows you to eliminate some mortgage management and preliminary costs. Users are also not informed that the promotional discount on the interest rate varies depending on the channel through which the mortgage is requested, such as the website, the branch or other intermediaries.
Irregular mortgages, risks for consumers and non-transparent costs
The Antitrust intervention follows a report from Codacons, which last May had denounced the lack of transparency of the simulations of Credit Agricolehighlighting how the mortgage was often presented with a lower APR than the actual one. The issue of the APR is of particular importance for consumers, as it represents a key indicator for comparing the total costs of a mortgage. With the partial inclusion of the policy, consumers risk being induced to take out a mortgage which has overall costs higher than those indicated in the initial simulations.
The lack of transparency is even more serious, considering that the APR is a fundamental element for families who take on the commitment of a mortgage for very long periods, usually twenty-five years or more. According to Massimiliano Dona, president ofNational Consumers Unionany confirmation of incorrect practices would represent damage to consumers, who find themselves having to manage unexpected costs in a long-term economic commitment. Dona underlined how, in the event of Crédit Agricole’s conviction, compensation would be necessary for the damage suffered by the consumers involved.
Similar practices: the precedent for 2022
It is not the first time that Crédit Agricole has come under the spotlight of the Antitrust. In February 2022, in fact, the banking institution had been fined one million euros for having directed consumers towards instant bank transfers – more expensive than the ordinary one – by suggesting it as the preferred option in his app. Users who attempted to select an ordinary bank transfer were in fact once again exposed to the choice of instant bank transfer via a highlighted box that presented the most expensive option as “Proceed with instant”.
This new investigation highlights how the Antitrust is strengthening monitoring of the credit sector to protect consumers against commercial practices that may be deceptive. The Crédit Agricole case could pave the way for more stringent regulation in the promotion of financial products. Transparency towards consumers is essential, especially in a context where mortgages represent long-term financial commitments and can heavily influence the family budget.
According to consumer associations, the lack of clarity in the indication of costs can compromise customer confidence in the banking institution and in the mortgage market in general.
The Codacons, in particular, expressed satisfaction for the intervention of the Antitrust, underlining the importance of monitoring any incorrect practices that limit freedom of choice and transparency for consumers.
In summary…
- The Antitrust is investigating Crédit Agricole for misleading advertising on mortgages.
- Codacons reports an APR lower than the real one in the mortgages promoted.
- Possible new regulations to protect consumers.
