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Banking Cartel

Case status:


Ius submitted on January 18, 2024, at the Portuguese Competition Court, five popular actions aimed at demanding that 12 banks acting in Portugal compensate consumers for the damages caused by a cartel in violation of EU competition law, already declared by the Portuguese Competition Authority. The “banking cartel” involved a continuous exchange of sensitive information regarding prices and other commercial conditions of mortgages, consumer and SME(s) credit, for 11 years, from 2002 to 2013 (the relevant period). 

In the event of full success, the actions will result in a global compensation assessed, at the lowest level and only until the end of 2022, as 5368 million EUR. This global compensation shall be intended to compensate the represented class of all consumers resident in Portugal who, during the relevant period, entered into mortgage and/or consumer credit agreements with banks in Portugal, and also all consumers residing in Portugal who, during or after the relevant period, purchased goods/services from the SME(s) that entered into SME credit agreements with banks in Portugal (including banks which did not participate in this cartel).

The anticompetitive behaviors undertaken by the banks led to an increase in interest rate spreads on loans contracted by consumers and a rise in prices paid by consumers for products and services sold by Portuguese SMEs that obtained credit during the relevant period. Ius is committed to ensuring that Portuguese consumers are compensated for these damages.

Defenses have already been received in the ABanca and Deutsche Bank cases.

The Court suspended the Mortgages/Consumer Credit case, in which nine banks are Defendants, prior to the submission of Defenses. Ius appealed this suspension.

The Competition Court has preliminarily accepted all five actions filed by Ius and has ordered the Defendants to be served and the consumers to be notified.


Case Details

What is the object of this action?

Compensation for the overcharge paid in mortgages, consumer and SME credit agreements (increased spread) entered into by Portuguese consumers/SMEs (in the latter case, with damages passed on to consumers) and all banks operating in Portugal during the relevant period. Additionally, Ius seeks rectification of the situation for the future, for contracts that are still in effect, to prevent further damage from occurring.

What are the unlawful behaviors of the banks?

Exchange of sensitive information about prices and other commercial conditions of mortgage, consumer, and SME(s) credit agreements resulting in anti-competitive effects on the corresponding market.

At least between 2002 and 2013, these banks exchanged, voluntarily and consciously, on a regular basis, sensitive and strategic information concerning prices, quantities (volume of credit), and other commercial conditions related to mortgage, consumer and SMEs credit offerings, which was not publicly available or could not be easily obtained. The exchanges included information on the intention to alter and/or maintain commercial conditions in the near future or currently. They would exchange this information in multilateral and bilateral contacts, by email, phone and in other ways.

The banks acted with the aim of replacing the risk of competition with practical coordination, artificially enhancing transparency among themselves.

Imagine a market where companies call up their competitor to tell them what prices they are about to offer to their potential clients. This is not the behaviour of companies competing on price. They allowed competitors involved in the exchange of information to remove or mitigate the risk and uncertainty typically associated with the strategic behavior of each competitor.

Who is represented in this action?

All the consumers residing in Portugal who entered into mortgage and/or consumer credit agreements with banks in Portugal during the relevant period, and also all the consumers residing in Portugal during and after the relevant period who purchased goods/services from SMEs who entered into SME credit agreements with banks in Portugal during the relevant period.

Therefore, the “banking cartel” impacted the vast majority of Portuguese consumers, especially those who, during the relevant period, entered into at least one mortgage or consumer credit agreement (e.g., credit cards, car loans, appliance financing, etc.).

Any consumer who wishes not to be represented in these actions may exercise the right to opt-out by communicating such intention to the Court.

Represented consumers may also decide to intervene in the proceedings in support of Ius Omnibus, within the period to be set by the Court.

How were the consumers harmed by the bank’s unlawful practice?

The unlawful practice in question caused damage to represented consumers as follows:

i) compromising healthy competition between the banks and consumer protection in the Portuguese market, with multiple consequences on the variety of products and their conditions in these markets, and

ii) causing damage to consumers due to increasing spreads in mortgages, consumer and SME credit agreements entered into by Portuguese consumers/SMEs (in the latter case, with damage passed on to consumers).

What is being asked in this action?

Ius is asking the Court to grant compensation to consumers for the damage caused by the banking cartel. In the case of contracts which are still ongoing, it is also asking that the price (spread) be reduced for the future to eliminate the effects of the cartel, to prevent further damage from occurring.

How does the popular action and consumers compensation work?

The mass consumer compensation mechanism used here, provided for in the Portuguese rules of class action, has never been tested in practice until the very last step. However, according to the law, the following will happen if the court finds in favour of Ius Omnibus:

i) the Court will set the overall amount of damages to be paid by the banks to the represented consumers, to be deposited within an entity designated by the court to manage the proceedings of distribution the amounts to the consumers that claim the damages within the deadline also established by the court in the final judgment, without prejudice to other distribution mechanisms as determined by the Court.

ii) the Court will designate an entity responsible for managing the compensation fund, including the receipt, management and payment of compensation to the represented consumers;

iii) the Court will set a deadline for represented consumers to claim their share of the compensation and this information will be publicized in various ways to be determined by the Court;

iv) the represented consumers, or their legal representatives, will have to contact the entity that manages the compensation fund, as well as submit the court-decided evidence and the respective payment instructions, in order to receive their share of the compensation, or proceed in any other way as may be determined by the Court.

Do consumers need to contact the Court or Ius Omnibus?

Consumers do not currently have to contact the Court or Ius Omnibus at this stage, nonetheless it may be in their interest to do so.

Ius has provided a platform that contains all necessary information, including relevant answers to questions that consumers may have.  If consumers want to be represented, they do not need to do anything else for now to be entitled to compensation if Ius Omnibus wins this claim. You will not be asked for any amount or payment, under any circumstances. Ius ensures your representation free of charge.

At the end of the case, if successful, they will have to contact the entity appointed by the Court to request compensation, themselves or through their legal representatives.

If they wish to intervene in the action in support of Ius Omnibus they may do so, through their legal representatives, within the time limit set by the Court.

All represented consumers in this action are invited to contact Ius Omnibus at once so that their data be registered and they be informed by Ius of all developments in this case, guaranteeing that they don’t miss the deadline to claim compensation, when that moment arrives.

Simply visit and fill out your information to ensure that you will receive regular updates and not miss the opportunity to receive compensation.

How is this case funded?

Preparing an action of this nature in an adequate way, which allows for its success, is extremely costly, requiring the hiring of specialized lawyers and consultants. The action’s success is dependent on suitably handling very broad and technical facts and an extremely complex area of legal-economic knowledge, as well as reacting effectively to the vast financial and human resources which will be deployed by the other sides, who benefits from profound information asymmetry. Parte superior do formulário

However, consumers will never be asked to pay anything, to take on any cost or to give up any part of the compensation they are entitled to.  This litigation is financed by a specialized entity in funding legal actions, the Augusta group. The funding agreement is submitted to the Court for scrutiny, with the funder lacking the possibility to interfere or determine the case management by Ius. The funder assumes full responsibility for all risks and costs. In the event of Ius losing the case, the funder is not entitled to any compensation. If Ius prevails, the funder will receive an amount determined by the Court as reasonable and equitable.

The funder will only receive this sum if a portion of the overall compensation paid by the banks remains after the deadline for consumers to request individual compensation has passed. The remaining amount is then allocated in accordance with the legal provisions.


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