Brazil's Itaú fined for consumer violations; court rules interest rates alone not abusive

The Federal District consumer protection agency (Procon‑DF) imposed a fine of R$420,000 on Banco Itaú after uncovering a range of practices that violated Brazil's consumer protection code. The infractions included unauthorized credit‑card charges, unilateral cancellation of insurance policies, improper use of FGTS balances as loan guarantees, and loans granted without proper customer consent. The sanction highlights growing regulatory scrutiny of banking institutions' treatment of consumers.

In a separate ruling, State Judge Nadia Inês Schmidt of Santa Catarina dismissed a lawsuit challenging a loan contract that charged a monthly interest rate of 10.49%, deeming it higher than the market average. The judge clarified that a rate exceeding the average does not, by itself, constitute abusive practice; the contract’s clauses were clear and the plaintiff failed to provide concrete evidence of abusiveness. The decision reinforces the requirement for demonstrable abuse before courts intervene in banking contracts.