GLOSSARY

Anatocism

Illegal banking practice which in fact has been unilaterally imposed by the banks for years consisting in the capitalization of interests payable on overdrawn current accounts normally every three months in order to increase illegally in a disproportionate way the actual nominal interest rate.

Interest rates “local use”

Clause contained in the bank accounts which has been considered illegal for years by the Court of Cassation which allowed the bank’s free will to fix the ultra-legal interest rate to be applied to the current account overdraft.

CMS (Maximum Overdraft Bank Charges)

Illegitimate cost item applied by the banks on the maximum amount of the period indebtedness (normally three months) in a percentage measure mostly determined unilaterally by the bank itself and considered not to be due by various sentences of the Court of Cassation.

Debits effected by the bank as advance tax deduction paid out

These are illegitimate debits paid out to the Revenue due to the greater amounts charged by the bank to the account-holder, but not due in consideration of the actual amount of the credit.

Disclosure

Obligation imposed to the banks which the banks themselves have often not respected to establish uniform criteria for the indication of the interest rate for the calculation of the interests affecting the financial value of the relation.

Contract essential elements

These are financial and behavioural elements which the bank must introduce under penalty of invalidity in the contracts and which without the client’s signature are considered as not affixed with extremely detrimental consequences for the banks

Obligation of information to the client

Duty imposed by law to the bank to inform the account-holder about the variations occurred for every term concerning the relation.  Should it not be carried out in the prescribed ways, this too implies detrimental consequences for the bank.

For further information write to:  anatocismo