Brazil government to investigate lenders for alleged credit card fraud

Banco Santander Brasil SA

25/08/2022 19:39

SAO PAULO, Aug 25 (Reuters) - Brazil's government on
Thursday announced it will investigate 23 financial
institutions, including the country's top banks, for allegedly
issuing unsolicited credit cards when customers signed up for
payroll loans and charging them undisclosed fees.
    The Justice and Public Security Ministry said in a statement
lenders provided customers with credit cards without prior
notice when they signed up for such loans, which are repaid
through automatic deductions from the borrower's paycheck.
    The investigation follows complaints from a consumer
protection agency in Rio de Janeiro state, it added, saying
payroll loan withdrawals were allegedly charged through the
unsolicited credit cards.
    Among those being investigated are Banco Bradesco SA
 BBDC4.SA , Itau Unibanco Holding SA's  ITUB4.SA  Itaucard,
Banco Pan SA  BPAN4.SA , Nubank  NU.N , Banco Santander Brasil
SA  SANB11.SA  and state-controlled lenders Banco do Brasil SA
 BBAS3.SA  and Caixa Economica Federal.
    Itau said in a statement to Reuters it does not operate
credit cards through payroll-linked loans and that it would
provide any additional clarification requested by Brazil's
Justice and Public Security Ministry.
    Nubank also denied offering such product, adding it is not
cleared to do so.
    Bradesco declined comment, while Banco do Brasil, Banco Pan,
Santander Brasil and Caixa did not immediately respond to
requests for comment.

 (Reporting by Paula Arend Laier; Editing by Cynthia Osterman)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5644 7745;))