Many of the complaints from families have to do with the application of public support for home loans, the BdP reveals.
Complaints about home loans more than doubled in 2023 compared to the previous year, to a total of 4,917 complaints, says the Bank of Portugal (BdP). A large part of these are related to the application of public support for housing loans, such as the renegotiation of loans and the exemption from early repayment fees. In fact, the undue charging of commissions for early repayment of housing loans led 84 banks to return 502,000 euros to families.
In 2023, the BdP received 26,976 complaints, 23.9% more than in 2022, the biggest relative increase in more than 10 years. “Consumer credit, bank deposits and housing and mortgage loans were the products with the highest number of complaints. Together, they accounted for 71.2% of total complaints in 2023, reflecting the relative importance of these markets,” reads the Behavioral Supervision Report of the Bank of Portugal (BdP) released on Wednesday, April 17.
Focusing on housing loans, the BdP concludes that the number of complaints more than doubled compared to 2022, with a total of 4,917 complaints received last year. “This increase is mainly due to the high number of complaints related to the exercise of the right to early repayment of the loan and the implementation of measures to mitigate the effect of rising interest rates on borrowers introduced by Decree-Law 80-A/2022,” it explains.
What are the main reasons for complaints about home loans?
These were the main issues that generated complaints about home loans, the document reveals:
- Early repay ment (12.3% of the total): these complaints were related to the delay in processing the early repayment and the failure to provide information on the impact of the credit repayment on the consumer;
- Implementation of measures to support borrowers (12.3%): this point highlights the delay or lack of response to renegotiation requests under the aforementioned legal regime; the alleged non-application of measures and procedures to mitigate the effects of rising interest rates on contracts; and the alleged non-application of the temporary exemption from the early repayment fee in credit contracts.
- Contractual clauses (10.3%): complaints related to the contractual interest rate and the request to renegotiate the credit agreement, namely to extend the repayment period and revise the spread;
- Calculation of the house installments and the APR (10.3%): this point included the determination of the applicable spread, based on the bonuses resulting from the optional associated sales and the calculation of the amount of the house installment according to the arithmetic average of the index, at the time of its periodic review.
Undue charging of commissions for early amortization leads bank to return 502 thousand euros
Many home loan borrowers who filed a complaint in 2023 were reimbursed, namely those who complained to the BdP that credit institutions were not applying the temporary exemption from the early repayment commission. There were 84 banks that didn’t apply this measure last year, but then had to settle 2,741 early repayment operations, returning a total of 502,681 euros to families.
This amount settled in early repayments of housing loans represents only 6% of the total amount that banking institutions were forced to reimburse their customers. In 2023, 111 institutions returned 8.3 million euros to customers, a figure “significantly higher than the amounts returned in 2021 and 2022”, says the BdP in the report. The central bank adds that of this amount, around 7.12 million euros went towards settling situations of irregular charging of commissions, among more than 225,000 transactions.
Thus, the BdP closed 24,707 complaints last year, in an average time of 55 days (47 days in 2022), and opened 102 administrative offense proceedings against 41 institutions. In the year under review, the banking regulator concluded 113 administrative offense proceedings concerning behavioral infractions, which resulted in fines of 1.8 million euros.
