Usury in Italy: the rate is fixed by law, not by agreement

When a loan becomes a criminal file: money, name and accounts

A usury accusation does not arrive like a bill. It arrives as a notice that an investigation exists, sometimes after a complaint by a borrower, sometimes after a bank or a tax inspection has noticed an unusual pattern of lending. By the time the lender hears of it, the consequences have often begun without any court having decided anything.

For a lender who runs a small business, the practical effects are immediate. Accounts may be examined and money frozen. Customers hear rumours. A bank that has noticed an allegation may tighten credit or close facilities. Partners worry about their own exposure, and an employer who lent to a colleague can find that the loan has changed every working relationship in the office.

For a family, the effects are quieter but just as wide:

• A parent who lent to a relative or a friend and charged interest may be shocked to learn that the arrangement is judged by a published threshold and not by what the parties agreed.
• A spouse may be asked about shared accounts and about money that came in from repayments.
• A person who lives abroad may find that transfers received from Italy are noticed by their own bank.

The civil side should not be forgotten. Where the rate is treated as usurious, no interest is owed, and a borrower who has been paying can claim back what was paid. A lender thinking only about the criminal case may miss that the money at stake in the civil case is a separate matter, with its own timetable.

Who arrives with a usury question

This page is read by people on both sides of a loan, and by people who never imagined that the word applied to them. The situations are varied.

• The lender who thought the loan was a favour. A friend, relative or business contact lent money and asked for repayment with something extra. Years later, the borrower complains, or an outside person reports, and the lender learns that the extra amount was compared with a published threshold.
• The small business owner who lends to suppliers or staff. Short-term lending in a workshop, a shop or a restaurant can become a regular practice, and the costs attached to it, such as commissions and charges, are counted together with the interest.
• The borrower under pressure. A person in difficulty took money from someone who then demanded repayment on terms that grew heavier, and asks whether the law protects them. The borrower is also a potential witness, and should be careful about what is said and to whom.
• The relative of either. Someone has received a notice of investigation, and the family wants to know what it means and what happens next.

Foreigners in Italy appear in all of these roles. A person who lends within a community of compatriots, in cash and by informal agreement, may not realise that the Italian threshold applies regardless of what the community considers normal.

Papers that show the real cost of a loan

A usury case is a case about arithmetic, and the paper that matters is the paper that shows what was lent, what was charged and what was repaid. Collect it early, in the form in which it exists, and do not tidy it.

• The contract or note, if it exists, including handwritten notes, messages and emails that set out the terms.
• Bank statements and receipts for every payment in either direction: the sum lent, instalments, commissions, expenses and fees of any kind.
• Messages and emails between lender and borrower, kept in their original form on the device, and not forwarded or edited.
• Any statement of the rate that was given at the time, whether in writing or in a message.
• The quarterly threshold for the type of credit, which the lawyer will find; the family does not need to calculate it.
• A timeline of dates: when the money was lent, when payments were made, when complaints began.
• Documents on the borrower's situation, where relevant, such as the purpose of the loan and any other creditors.
• Anything received from the authorities: notices, summonses and requests for documents, photographed in full.

The lawyer will do the calculation of the total cost against the threshold. What the family can do is make sure that the raw material is whole and unaltered.

Repay, renegotiate, stay silent or complain: the decisions

People in this position want to do something, and the available actions have prices that are not obvious.

• Return the money or part of it. A lender may want to repay interest to calm the situation. This can look like an admission, and it does not necessarily close the criminal side. It should be done only on legal advice, in a way that is documented.
• Renegotiate with the borrower. A new agreement can reduce the future exposure but can also be read as pressure on a witness if it is made while an investigation is open. Contacts with the other side should go through counsel.
• Stay silent when questioned. The right to silence protects against statements that may be misread, particularly where the calculation of the rate is technical and a casual explanation can be wrong.
• Complain, as a borrower. A borrower who goes to the authorities becomes part of the case. The benefit is protection and the possibility of recovering money; the cost is exposure of the borrower's own affairs.

Whichever side you are on, the question that matters most is what is already on the file. A defence prepared without knowing that is a defence prepared in the dark. The lawyer's initial task is to obtain access to what the authorities hold, and to explain it in plain terms before any decision is taken.

What to avoid while a rate is under question

When usury is alleged, ordinary kindness and ordinary haste both cause damage. The points below concern conduct.

• Do not contact the borrower to settle the matter privately. Even a friendly call can be reported as pressure, and a proposal to repay can be described as an attempt to buy silence.
• Do not rewrite or backdate documents. A corrected contract that did not exist at the time is evidence against you.
• Do not delete messages. Messages are often the best evidence of what was agreed, and deletion looks like concealment.
• Do not explain the rate in a casual interview. The calculation is technical, and the total cost of the transaction includes items that a lay explanation will leave out.
• Do not move money or assets in a hurry. Rapid transfers look like an attempt to hide proceeds.
• Do not post or discuss the matter in family or community groups. Group messages are collected and can be quoted.
• Do not assume that a written agreement protects you. The threshold is applied regardless of what the borrower agreed.

If you are a borrower, the same rule of discretion applies: say little, keep everything, and let the lawyer decide what to put forward.

Questions for a lawyer about thresholds and total cost

The central issue in a usury file is how the cost of the loan compares with a published limit. These questions go to the points that non-specialists seldom think of.

• Which threshold applies to this type of credit and at what date is it measured?
• Which elements count towards the total cost: commissions, expenses, charges linked to the loan?
• Is the allegation that the rate exceeded the threshold, or that the situation was a case of usury without a rate above it?
• Does the arrangement between individuals change how the threshold is applied?
• What is the position if interest was never actually paid?
• How does the civil side work: is interest owed at all, and can the borrower recover what was paid?
• What has the authority collected so far, and can the defence see it?
• Could a company be involved, and if so, who speaks for it?
• What should I keep, what should I stop doing, and whom should I stop talking to?

A lawyer familiar with these files will return to the arithmetic again and again, because that is where the case is won or lost. Treat a lawyer who avoids the numbers with caution.

Lenders and borrowers in different countries

Many loans involve people who live in different places. A relative abroad lends to a family member in Italy, a business owner abroad finances a supplier in another, or a borrower in Italy receives money through a transfer from overseas. The usury analysis does not disappear because the lender is abroad.

The cross-border points are practical:

• Documents in other languages must be translated into Italian for the authorities, and the translation should be carried out by someone who understands the financial terms.
• Transfers between accounts in different countries leave records in both, and each bank may report in its own way.
• Currency conversions and transfer fees can count towards the total cost of the loan, so receipts from the transfer provider matter.
• A lender who lives abroad may be unable to attend an interview in Italy at short notice, and should designate someone who can act with a written authority.
• Calls between Italy and the lender's country should be arranged with the time difference in mind.

Where the lender has left Italy, the question whether and how to return becomes part of the strategy. Travelling without advice may expose the person to measures that can be avoided by a planned appearance through counsel. If the borrower lives abroad, the lawyer should know whether they will be willing and able to give evidence.

Usury terms from the Italian sources

The terms below appear on this page or in the Italian guides it draws on. They show up on notices and in lawyers' emails, and a plain reading helps you follow them.

• Tasso soglia (threshold rate): the limit fixed by decree each quarter for a given type of credit; a rate above it is treated as usury.
• Usura presunta: usury established by the fact that the total cost exceeds the threshold, without a need to prove more.
• Usura in concreto: usury in the specific circumstances, where the rate is below the threshold but the conditions exploit the borrower's difficulty.
• Informazione di garanzia: the notice that an investigation exists and that the person is a suspect; it is not a finding of guilt.
• Indagini difensive: inquiries the defence may carry out itself, such as collecting documents and taking statements.
• Procedibilità d'ufficio: a case that the authorities pursue without needing a complaint, so a borrower cannot simply withdraw.
• Total cost: interest plus commissions, expenses and charges linked to the loan, however they are labelled.
• Interest not owed: the civil effect that, where the rate is usurious, no interest is due at all.

If a notice contains a word not on this list, send a photograph to the lawyer before replying to anyone.

How the studio takes on a usury file

Instructions can be given by phone or email, using the contacts on this site, and urgent matters are taken at any hour. The studio works from Rome, Milan and Naples, and nobody has to visit an office to open a file.

The person who contacts the studio sends a short message with name, role in the loan, the date on which a notice was received, and photographs of anything issued by the authorities. A written engagement is returned by scan or photograph. An initial call sets out the facts in the order they happened, identifies what the authority holds, and agrees which documents to collect.

The studio's initial technical task is the arithmetic: reconstructing what was lent, what was paid and what the total cost was, so that the defence knows how the numbers compare with the threshold before any decision is taken. A further task is to examine what the authorities say the offence is, since the allegation may rest on a rate above the threshold or on the circumstances of the loan.

Where the lender or borrower lives abroad, the studio coordinates with a lawyer in that country for matters that touch it, such as bank records and local translations, and keeps a clear line of communication with the person. It does not predict the outcome of the case. Updates go to the person concerned or to a nominated relative, and calls are scheduled to suit different time zones.