Although the 2008 financial crisis triggered further legislation to protect banking clients and investors, the relationship between banks and customers had been a focus of legislators and regulators long before the banking collapse.

Deposit compensation scheme

The Deposit Guarantee Fund, a deposit compensation scheme, aims to guarantee the reimbursement of deposits held with credit institutions incorporated in Portugal and Portuguese branches of credit institutions incorporated in non-EU member states that have no equivalent compensation scheme. Reimbursement is guaranteed up to €100,000 per depositor.

Bank-client relationships

When considering the relationship between financial intermediaries and banks and their customers, the rules set out in the EU Payment Services Directive (2015/2366/EC) (PSD II) and Decree-Law 298/92, as amended (the Banking Law), must be considered. PSD II obliges financial intermediaries to undertake effective and transparent procedures to handle claims from non-qualified investors. Further, the Banking Law required credit institutions to adopt codes of conduct which are disclosed to the public and include all principles and rules underlying the bank-client relationship, as well as information on claims-handling procedures. Further, the Banking Law provides the possibility for customers to directly present claims to the Bank of Portugal. Although it is not mandatory, major banks in Portugal have their own ombudsman, which is in charge of claims reception and follow-up.

Consumer complaints

Banks and other financial intermediaries must also comply with general consumer complaint procedures which, among other things, oblige them to have a complaints book available. All claims must be followed up by the competent supervisory authority.

Breaches of contract

Decree-Law 227/2012 established a set of rules that must be complied with by credit institutions with regard to breaches of contract and the non-judicial settlement of payment defaults. In a move to protect small companies and consumer borrowers in difficult times, this law also created a banking client support network aimed at preventing breaches of credit contracts and promoting the non-judicial settlement of credit contract-related conflicts.

Residential mortgage loans

Residential mortgage loans have also been on the radar of the Portuguese legislature and the Bank of Portugal. The corresponding legal regime was amended by Law 59/2012 of 9 November 2012 and established a range of measures to reflect the increased difficulties for Portuguese households to meet their financial obligations. Some of the changes are general in scope, but others specifically target unemployment or special economic needs and apply to pre-default and default situations. In turn, the mortgage loan legal framework should be applied alongside a set of duties that banks must comply with during the negotiation and enforcement of such loans.

Minimum information duties

In 2014 the Bank of Portugal issued a regulation on minimum information duties under consumer credit contracts. This regulation was adopted following Decree-Law 133/2009, which established the information to be provided by credit institutions before entering into consumer credit contracts and specified the terms, frequency and formalities under which said information must be provided.

For more information please contact Benedita Aires, Maria Carrilho or Salvador Luz at VdA by telephone (+351 21 311 3400) or email (bla@vda.pt, mlc@vda.pt or sml@vda.pt). The VdA website can be accessed at www.vda.pt.

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