Consumer Group May Bring Italy’s First Class Action Lawsuit
According to this article from Reuters, Italian consumer group Adusbef may file Italy’s first class action lawsuit in its fight against Italian banks’ use of a “most hated” type of compound interest on loans.
The article notes that a recently enacted law will allow class action lawsuits to be filed in Italy for the first time beginning in July 2008, and Adusbef may bring such a suit against the practice of “anatocism, where compound interest is calculated on the initial loan plus interest that is accumulated each time the money comes due.”
Adusbef is quoted as stating that anatocism is a “form of usury” and “the most hated banking practice.” The article states that although it is banned by the Italian civil law code, Italian banks have been using compound interest for over 50 years.
