AMEX prohibited from issuing new credit cards in Italy because of usury law violations

[panzerfaust]

(and for the possibility of money laundering, and for not revealing to customers what their credit limits were - so they were often exceeded)

http://www.world-newspapers.com/italy.html

It all started with the proceedings initiated at the State Prosecutor's Office in Trani, following complaints that usury-level interest rates were being applied to payment instalments for those cards that allow them, such as revolving credit cards. This led to an inspection by Bankitalia’s supervisory committee, resulting in the issue of cards being suspended. Bankitalia explained that this was a “necessary measure”, since the company had broken the law.

The inspection revealed three violations. The first regarded exorbitant interest rates and default interest applied to late payments or when credit limits were exceeded. Interest was calculated not only on unpaid instalments but also on the remaining credit. Moreover, the interest was then recalculated over the following three months, with the resulting surcharge exceeding the legal usury threshold. The second offence violated the law against money laundering: failings in the company’s centralised computer archive meant limited character space for registering customers, with the consequent use of abbreviated names and reduced card holder identifiability. Thirdly, the company had not complied with transparency regulations, by failing to inform customers when predefined credit limits were in place and what they were. This led card holders to unconsciously exceed their credit limits. The suspension on the issue of credit cards will last until Amex Italia comes into line by addressing their shortcomings and correcting their calculation procedures. At present, Amex has 702,000 cards in circulation with monthly billing, plus 224,000 revolving credit cards, which allow card purchases to be paid in instalments. According to Bankitalia, the total credit involved amounts to €224 million for the former and €276 million for the latter. 70% of revolving credit card holders, however, settle their bills monthly rather than in instalments.
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Pretty bad when Italy is the one to go after AMEX. What is our, newly hopeful, government doing?

[malaise]

1. That is the only way to deal with these

robber barons