Consob arbitrator asks intermediaries to pay more attention to their clients

Male, no longer very young and resident in the North. This is the identikit of the person making investment appeals to the Arbitrator for Financial Disputes, as emerges from the Acf's 2024 report (see Plus 24 of 30 March 2024), presented on 18 April in Rome by President Gianpaolo Edoardo Barbuzzi. One of the highlights of the 2023 activities is the fact that the number of appeals has dropped below one thousand (which was also the original estimate on which the Acf structure was 'set up').
With respect to this often elderly customer, the ACF recommends greater attention, also in terms of time on the part of the intermediaries, especially in the profiling phase: it is no coincidence that the case of an over-eighty-year-old is cited to whom an evolved profile had been attributed, with long-term investments, whose profiling appears to the arbitrator "at least superficial, if not opportunistic and instrumental".

In 2023, therefore, 963 appeals were received by the Acf, although 1,237 were settled, partly disposing of the backlog accumulated in previous years, with customer compensation exceeding 13 million euro. Especially in the first years of activity, the Acf had been hit by the 'aftermath' of the serial litigation related to the LCA of the Veneto banks and the resolved banks, once this wave had passed, the situation settled down towards numbers that are considered more physiological.
In any case, over 10,250 proceedings have been concluded in the seven years of the Acf's activity. The percentage of successful appeals remains high: 56.8 per cent. A remarkable percentage even if compared to an aggregate average, referring to the seven years of activity, of 64.1 per cent. By the end of 2023, the total amount of sums awarded to date in favour of savers came to 156 million euro, with an average value of compensation of almost 35,000 euro per capita (average claims, however, stand at around 56,000 euro, which drops to around 50,000 for successful appeals). In addition, the percentage of voluntary execution of decisions by intermediaries remains high - net of certain serial strands in the process of being definitively exhausted - 95.5% of appeals are executed by those concerned. Moreover, in 2023, 86 intermediaries were called to account for their actions before the Arbitrator, bringing the total number of intermediaries involved from 2017 to date to 238. This compares with 1,325 intermediaries who are members of the Acf system.

The ACF reproaches intermediaries with - as already mentioned - a lack of attention to the customer profiling phase, calling for appropriate measures to be taken to verify the reliability, accuracy and consistency of the information collected (and which the customer must provide so that it is correct, up-to-date and complete). To do this, according to Barbuzzi: "The questionnaire must be based on a series of congruous, coherent and consequential questions, such as to bring out the investor's real profile.
To this end, it is desirable that intermediaries converge towards a standard and generally used profiling questionnaire format, in function of which we are willing to provide our contribution of experience". Even the adequacy assessment can be done (and should be done) better: "It fulfils its proper function only if it is the expression of a reasoned and not apodictic judgement, which clearly illustrates the reasons why the investment is considered consistent with the client's objectives, giving an account of the information used for this purpose and avoiding the use of generic expressions only.
If pre-formulated statements are used, care must be taken to ensure that they are sufficiently granular. On that basis, advisory reports characterised by a generalised use of standardised expressions, which end up debasing the purpose of the act, cannot be said to serve the purpose'.

The Acf also denounces the use of certain contractual provisions "that are characterised by the total exoneration of responsibility of the intermediary in the event of malfunctions of the platform for on-line operations, without the indication of deadlines for recovery, nor of alternative channels to guarantee operational continuity". An unappealable judgement on this profile: "Apart from profiles of possible vexatiousness," states Barbuzzi, "such provisions prove to be, in the current and non-reversible phase of migration of transactions to the web, first and foremost anachronistic and, in any case, end up transforming the customer's position from weak contractor to hostage for an indefinite period of time. Moreover, in a context - that of the financial markets - in which the time factor is so decisive that seconds weigh like hours, hours like days, and so on'.

The majority of claimants (over 60 per cent) are assisted by a professional - usually a lawyer -. This is despite the fact that the presence of a 'defender' is not necessary to appeal to the ACF, as the person concerned can appeal alone. But apart from the well-known financial shortcomings of investors, there is also the question of the relevance of the amounts at stake (as mentioned above) and the complexity of the matter addressed by the Arbitrator. It must be said, however, that if one thinks that the situation requires the presence of a lawyer, it is better to involve him as early as the complaint to the intermediary, which is a condition for then going to the arbitrator. In fact, the complaint and the appeal must address the same issues.
At a recent conference in Milan, during the Salone del Risparmio, President Barbuzzi also called for more intervention by consumer associations, which in many cases can be a valuable help for complainants.