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The protection of the transparency of contractual conditions and of the correctness of relations with customers

The rules on the transparency of contractual conditions and the correctness of relations with customers allow the customers of banks and financial intermediaries to know what are their rights and obligations when they acquire banking and financial products (current accounts and other types of account, loans and payment instruments).

Clear and correct information on the products and services supplied is important for everybody. For intermediaries it means avoiding the risk of disputes with customers and loss of reputation. For customers it means being able to compare different offers easily and to make well-informed choices. This encourages competition and helps to hold costs down.

Intermediaries must:

• allow customers to know the characteristics and costs of services;
• ensure that the conditions applied correspond in every respect with those advertised;
• send periodic communications on contractual relationships and in particular on the actual amounts of lines of credit available.

These obligations do not have only a formal value, they were also introduced to influence the substantial correctness of the relations between intermediaries and customers.
The most recent are especially stringent and concern:

• the information to be provided to retail customers: consumers, professionals, artisans, non-profit organizations and micro firms;
• the organizational measures that guarantee compliance with the rules on the transparency of contractual conditions and the correctness of relations with customers, such as those governing the handling of complaints and the use of transparency documentation in the marketing of banking and financial products.

The Bank of Italy carries out controls on compliance with the obligations regarding transparency and correctness by means of inspections on intermediaries' premises and checks on the proper functioning of organizations and their internal procedures. On the occasion of the observations provided for by law on usury, the Bank checks compliance with the "threshold rates" on loans and other forms of financing.

If the Bank of Italy finds anomalous or incorrect conduct, it intervenes with measures that depend on the type and importance of the anomalies and requires intermediaries to:

• adjust their contracts to the relevant legal or regulatory provisions;
• reimburse customers who have had conditions applied more onerous than those advertised;
• restore the conditions agreed in the event of changes with retroactive effects unfavourable to customers and of which they were not informed in the manner prescribed by law.