Brazil government to investigate lenders for alleged credit card fraud (updated)

Banco Santander Brasil SA

25/08/2022 23:49

(Adds statements from banking lobby group, more banks)
    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
that 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 under investigation 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.
    Brazil's banking lobby group Febraban said in a note that of
the 23 institutions mentioned in the investigation, only seven 
have authorization to grant payroll loans.
    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.
    State-owned lender Banco do Brasil said that "it has not
issued payroll credit cards for four years and is available to
authorities for further clarification."
    Santander Brazil said it learned of the investigation
through the media and that it was not contacted by authorities.
It added that "all its products and services comply with
regulation and that it is available to the competent bodies to
provide clarifications."
    Nubank also denied offering such a product, adding it is not
cleared to do so.
    Banco Pan said it is in contact with authorities to obtain
official information and "reinforces its position of respect for
customers and its commitment to combat fraud."
    Bradesco declined comment, while Caixa did not respond to
requests for comment.

 (Reporting by Paula Arend Laier and Aluisio Alves in Sao Paulo
Editing by Cynthia Osterman and Matthew Lewis)
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