More than 700,000 families have failed to pay off bank loans

The moratorium has raised complaints about institutions in 2020, notes the Bank of Portugal.

Over the past year, banks have initiated 707,000 new out-of-court settlement procedures for families who are no longer able to pay their claims, with a total amount of contracts worth € 2,990 million. The data was released on Monday by Banco de Portugal and included in the behavioral supervision report.

According to the report, last year 652,565 PERSI (Extrajudicial Procedure to Resolve Non-Compliance Cases) were initiated in the context of consumer credit. This represents an increase of 5.6% compared to 2019. Overall, these operations include contracts of € 1,144 million.

To curb the increase in bad loans in banks, the government imposed a temporary suspension, as one of the measures to contain the effects of the epidemic.

Now, according to the same report, Banco de Portugal received 19660 complaints from bank customers in 2020, an increase of 8.6% compared to the previous year, due to the volume of complaints “about covid-19 matters”, namely moratoriums in credit (1895 in total).

“As a result of its supervisory activities (regarding the moratorium), it issued 284 specific orders to 100 institutions and filed ten administrative procedures against seven institutions,” the supervisor said.

Tightening fees

The report also indicates that withdrawing money without a prescription at a bank in Portugal was, on average, 19.19% more expensive in 2020, with the maximum commission charged for cash withdrawals at a branch of € 20.

In 2020, there was an increase in commissions for most of the most popular account-to-pay banking services.

Availability of a debit card started costing, on average, 1.7% to a customer, and could reach € 31.20. The average commission charged for cash payments at ATMs increased by 7.23%.

As for the current account maintenance fee, it recorded, on average, according to Banco de Portugal, a 1% decrease, with the average amount fixed at € 62.4 per year.