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Here’s one of the reasons why.
A couple of weeks ago I spotted an unfamiliar charge on my bank statement. It’s hard to know what Brazil’s banks are charging you for because they deliberately make the statement unintelligible.
For example, instead of writing: Payment for Private Health Plan – 601,94 reais, they write AG. PAG TIT 236431171236362 – 601,94.
After taking a closer look I saw they’d been taking 20 reais out my account every month since the start of the year. I knew it couldn’t be a monthly charge for running my account because I’d last year specifically asked Itau not to charge me the monthly fee and they’d removed it.
(Banks won’t tell you this but you are not obliged to pay a monthly fee. As long as you’re not using a certain number of checks or withdrawals, banking is free.)
So I went to the bank and asked about the mysterious charge. They opened an investigation and promised to call back within a week. They didn’t so I went back and complained again. A few days later I got a phone call.
After half-heartedly trying to shift the blame on me the bank eventually admitted they had illegally reinstated the monthly charge. For seven months I’d been paying them 20 reais a month even thought I had specifically asked them to remove it.
The bank apologised (in their own unapologetic way) and promised me they would reimburse me the 140 reais.
Excellent, I thought and celebrated one of life’s tiny victories.
I told a friend about this triumph and he laughed. They’re still screwing you, he said.
How’s that, I asked.
The answer is this:
When a bank or utility illegally charges you or overcharges you they are obliged not just to pay you back what they owe but pay you back DOUBLE.
I checked. He’s right. Here‘s the Defesa do Consumidor page saying exactly that.
So I went back to Itau and asked them if I was entitled to receive double. They said Yes, and promised to begin the process to pay me the extra 140 reais.
Why didn’t you tell me that under the law I was entitled to receive double, I asked.
We only pay double to those that ask, my bank manager responded.
So even though you know the law says you should pay back double, Itau doesn’t do that unless customers ask specifically for the letter of the law to be applied.
She hummed and hawed and told me that was the culture here and that all banks did it this way.
I told her Itau were nothing short of thieves.
She shrugged her shoulders and looked sheepish.
I will now wait and see if Itau pay me double as they’re supposed to. But I at least established another reason Itau’s profit last year was the second biggest in Brazilian banking history.
By deceiving their customers.
One colleague called me a misanthrope the other day. Another often refers to me as Mr Angry. A Scottish pal in Rio calls me Begbie (after the notoriously angry character in Trainspotting).
They all mean it in jest (I hope!) and I usually take it with a pinch of salt and a laugh.
But there’s a lot to be angry about these days and I don’t just mean big banks destroying the livelihoods of millions just to make a few more pennies, or the spinelessness of politicians who have allowed them to get away with it.
Case in point today in Brazil, where Bradley Brooks from the Associated Press just published this sensational story about how big car makers in Brazil are routinely churning out vehicles that fail the same safety tests they wouldn’t dare fail in the developed world.
Unsafe cars, coupled with the South American nation’s often dangerous driving conditions, have resulted in a Brazilian death rate from passenger car accidents that is nearly four times that of the United States.
The culprits are the cars themselves, produced with weaker welds, scant safety features and inferior materials compared to similar models manufactured for U.S. and European consumers, say experts and engineers inside the industry. Four of Brazil’s five bestselling cars failed their independent crash tests.
Manufacturers earn a 10 percent profit on Brazilian-made cars, compared with 3 percent in the U.S. and a global average of 5 percent, according to IHS Automotive, an industry consulting firm.
Only next year will laws require frontal air bags and antilock braking systems on all cars, safety features that have been standard in industrial countries for years. The country will also have new impact regulations on paper, at least; Brazilian regulators don’t have their own crash-test facility to verify automakers’ claims about vehicle performance, nor are there independent labs in the country.
In short, Brazil’s car makers are cutting corners and costing countless lives because it is cheaper to make poor quality cars than it is to spend more and make the cars as safe as they would in the US or Europe. And the government is quite happy to let them.
This in a nation where cars cost three times what they cost elsewhere.
Seriously, the question isn’t why am I angry. The question is: Why isn’t everyone?
The Santa Maria disco fire is now officially the worst disaster in Brazil for half a century. But it would be wrong to interpret the tragedy in which 233 people died as just one more example of incompetence.
The mistakes made at the Kiss nightclub are disgustingly common and have been made repeatedly the world over. This list of the 10 deadliest modern nightclub fires includes several from the US, as well as from France and Argentina.
I’ve written and broadcast a lot recently about Brazil’s culture of impunity and how the mensalao trial indicates that this could be ending. (Some of Brazil’s best-known and most powerful politicians were last year found guilt of political corruption and they face considerable jail time.)
What happens in Santa Maria will give us a clear signal as to whether that culture of impunity really is coming to an end.
Many mistakes were made and many questions must be asked.
- - Were there enough emergency exits?
- - Were they big enough?
- - Were staff trained in evacuation and crowd management?
- - Why was the band allowed to use fireworks in an enclosed space?
- - Why was cheap and flammable acoustic foam used on the roof?
- - Why were the windows barred?
- - Did the club have the proper safety and fire certificates?
- - If they didn’t, who signed the papers that allowed the place to keep opening?
The issue now is addressing those questions and bringing those responsible to justice.
Brazil has made huge strides in recent years but only if those responsible for the deaths are brought to justice can it maintain that progress. Anything else would be a massive travesty and a slap in the face to the families of those who died.
Common sense prevailed today in the case of the Palmeiras handball goal.
Judges with the Supreme Tribunal of Sports Justice (see their decision here) ruled that the referee was right to disallow the illegal goal and confirmed the 2-1 victory for Internacional stands.
As I explain in my Reuters story here:
Palmeiras were losing the Brazilian championship match on Oct. 27 when Argentine striker Hernan Barcos punched the ball into the net to apparently level the score.
The referee originally disallowed the goal but back-tracked amid furious protests from Internacional players, delaying the match for five minutes.
Palmeiras claimed the fourth official had been told of the handball by a colleague who watched a replay.
Barcos didn’t deny punching the ball into the net, although he alleged it was not deliberate.
But Palmeiras argued that match officials chalked the goal off only after seeing it on television replays, which would violate FIFA’s rules.
Palmeiras are almost certain to be relegated for the second time in 10 years.
They currently lie third bottom of the league and are seven points behind the team fifth from bottom with four games left to play. Four teams go down.
Here’s the goal at 1:20 in this clip:
Here’s a cool idea from Brazil.
Rather than suspend football players for fouls, handballs and ungentlemanly conduct, authorities here are making them do community service.
It’s a novel ‘punishment’ for players who all too often abuse their role model status.
Among those receiving alternative sentences in recent months are Sao Paulo and Brazil striker Luis Fabiano, Palmeiras’ Chilean midfielder Valdivia and troublesome Corinthians striker Emerson Sheik.
Valdivia was ordered to spend his 10,000 real fine for insulting a referee on food and other aid for an orphanage in Rio de Janeiro while Luis Fabiano was sentenced to visit a rehabilitation centre for handicapped children. Emerson yesterday visited children being treated for cancer.
All declared the experience enlightening.
“This isn’t punishment,” said Luis Fabiano, shortly after bonding with a spunky six-year old who claimed to be a fan of rival Corinthians. “It made me really happy and gave me great satisfaction to spend some time with these kids, it was priceless, Sometimes we complain about little things and a visit like this serves to motivate us all.”
“This type of visit is educational as well as being punitive,” said Flavio Zveiter, who heads the court that metes out punishment to footballers in Brazil.
“These guys are heroes to lots of people and this helps them reflect about their position and responsibility to society. They sometimes live in their own little world and they don’t realise that what they do has repercussions in society as a whole.”
Zveiter said he was moved after seeing Luis Fabiano interact with the disadvantaged kids and vowed to hand out more alternative punishments in the future.
“It think the repercussions were positive, the player himself said he was touched by it and that was the main thing,” Zveiter said. “I intend to use this policy more.”
The policy sometimes works and sometimes doesn’t.
Emerson, the man who played such a huge part in helping Corinthians win the Copa Libertadores earlier this year, turned up almost three hours late to see kids at the Graacc hospital.
Authorities might want to reinstate his ban. Turning up three hours late for a meeting is a total lack of respect under any circumstances. For children with cancer it’s an outrage.
Here’s a local TV report on Emerson’s visit:
Brazil’s Supreme Court is in the middle of its Big Brother moment. Everywhere you look there are old people in togas.
The justices are trying 38 people accused in the mensalao trial, the biggest and most gripping trial ever to come before the highest court. It’s live on television every day and what happens is headline news.
In addition, President Dilma Rousseff this week named a new justice, Teori Zavascki, 64, to replace Cezar Peluso who was forced to retire after turning 70 years old.
Here’s the odd thing. Peluso was forced to stand down in the middle of the biggest trial of the century because he reached mandatory retirement age. That could have potentially awkward consequences if the 10 remaining judges are deadlocked.
The other odd things is that Zavascki – if he passes the Senate confirmation – goes straight onto the bench and can vote in the mensalao trial – EVEN THOUGH HE HASN’T HEARD THE EVIDENCE SO FAR.
So here’s a thought. Why not make a provision for judges who reach retirement age to stay on until their ongoing trial ends, or until the current session is over?
And have his replacement take up his role at the start of the next case, not half way through the existing ones.
Wouldn’t that better serve the cause of justice?
(Speaking of Brazilian justice, here’s an excellent piece from Reuters on the same subject.)
A Brazilian court has turned down a habeas corpus appeal by lawyers for Kia Joorabchian and is maintaining charges he laundered money while working as a director of Copa Libertadores champions Corinthians in 2005.
The court said Joorabchian and Nojan Bedroud illegally brought $32.5 million dollars into Brazil while directors of Media Sports Investment, the company that ran Corinthians from 2004 to 2007.
The money came from illegal sources in Russia and elsewhere and was used to buy players for Corinthians, Carlos Tevez and Javier Mascherano among them, the Superior Court of Justice said.
Argentines Tevez and Mascherano signed record deals with Corinthians in 2005 and helped the club win the Brazilian championship that year. They were later transferred to West Ham in a financially controversial deal.
Tevez now plays for Manchester City and Mascherano is at Barcelona.
Joorabchian, an Iranian who spent much of his life in the UK, became friendly with Tevez when they were both at Corinthians and is still close a close advisor to the controversial striker.
Joorabchian’s lawyers had requested the case to be thrown out, claiming all evidence was gained by illegal wire taps. The court rejected that appeal and said the accusations stand.
It is unclear if there is still an arrest warrant out for Joorabchian, who now rarely visits the South American nation.
Corinthians won the Copa Libertadores in July and go to Japan for the World Club Championship in December where they could face Champions League winners Chelsea.
Celebrities, either through talent or opportunity or luck, or a mixture of all three, live charmed lives doing what they love and getting paid huge sums of money for it.
Society fawns over them and many people, especially the young, look up to them as idols.
Brazilian soap opera actress Dira Paes (right) is one of them. Romario is another. Mano Menezes, the manager of Brazil, is another. Actress Carolina Ferraz is another. Singer Djavan is another. Former Flamengo and Inter Milan player Adriano is another. And there are plenty more.
What do they all have in common apart from the fact they are very rich and hugely admired? They all refused to take breathalyser tests when stopped by police.
Paes was the latest and like most of these jokers she swore she wasn’t drunk. She complained that Brazil has a zero tolerance for people who drink and drive.
More than 40,000 people died in traffic accidents in Brazil last year. Between 40 percent and 75 percent of those deaths are alcohol related.
Are those statistics not clear enough?
Is it too much to ask that cosseted celebrities like Paes and Menezes and Adriano set an example?
One of the most remarkable things about Brazil is how much leeway major companies get to screw consumers.
Regulatory agencies are so weak or so close to the big business that even when malfeasance is proven clients are rarely compensated and the firms remain impune.
“I think the regulatory agencies are protected,” the head of Procon-SP, the state’s most important consumer defence body told me earlier this year. “They are closer to the companies than consumers. Big business interferes with the regulatory agencies much more than consumers do.”
Another example of just such nefarious conduct has come to light in recent days, as I write about today in this Financial Times blog.
The federal public prosecutor’s office in Rio announced it has filed a lawsuit against three of the country’s biggest banks, Santander, Itau-Unibanco and HSBC, accusing them of imposing illegal bank charges on clients.
The illegal charges brought the banks more than R$500 million between 2008 and 2010. They were charging certain fees even after Brazil’s Central Bank told them they were illegal and that they must cease and desist.
The public prosecutor’s office is seeking R$1 billion in damages, according to this statement. Some of the money will go to the affected clients and the rest will go to the Diffused Rights Defense Fund, where it will be used to fight more consumer cases and for environmental projects.
The office decided to go ahead with the case only after the banks ignored its appeals to fully compensate consumers. Itau-Unibanco and Santander paid some of the money back but HSBC did nothing, it said. Even though the Central Bank told them they were in the wrong!
To me, what’s breathtaking about this is not just that banks are robbing us blind and then refusing to be held accountable. The average annual interest rate for repaying credit card debt is a whopping 238%!
Having lived here for so long, I’ve found banks, and especially Itau, treat customers with little more than contempt.
What is also amazing to me, and much sadder, is that there’s not more of an outrage about cases like this.
This story was buried in the back of the nation’s top dailies. Consumers are so powerless and have become so used to the abuse that they do little more than shrug their shoulders.
This case is not dissimilar to another that came to light last year when electricity companies were found to have overcharged customers to the tune of R$7 billion over eight years.
The regulatory agency, Aneel, refused to take action and demand compensation.
Consumer affairs activist Maria Ines Dolci summed up their refusal to compensate for the overcharging this way: “The allegation is so ridiculous as to be offensive; according to the agency, there is no legal framework for retroactive payments….I really don’t understand the regulatory agencies. They don’t level the playing field for governments, companies and consumers. They simply take the side with the strongest. Period.”
I couldn’t agree more. Brazilian consumers need to complain more and raise more of a stink.
So kudos to the Rio office taking on this case. I am behind them all the way.
The OECD’s triennial education results were issued yesterday and for Brazil it was like getting a B for effort and a D for results.
The scores recorded by Brazilian students in maths, reading and science were better than those in years gone by but they were still poor, in most cases well behind not only the OECD average and their BRIC colleagues, but also their Latin American neighbors.
Brazilian kids came 57th out of 64 economies in math and science but fared marginally better in reading, where they ranked 53rd.
Brazilian leaders have long know that education is a major worry but they have done very little to improve standards in primary and secondary schools. (Here’s a piece I wrote for the New York Times on the relationship between education and growth in 2007.)
Kids in state-funded schools have big classes, poor teachers and not enough books, computers and other equipment to do the job.
Lula has been spectacularly successful in making life better for the country’s less well off. But that change has focused on income, rather bolstering institutions. The poor have more money to spend but schools, hospitals and the justice system do not serve them much better than before.
That has to change.
The report can be found at the OECD page here:
The survey was carried out in 70 economies and for the first time included participants from China. Students in Shanghai took the test and shamed their rivals by scoring highest in all three disciplines.
“More than one-quarter of Shanghai’s 15-year-olds demonstrated advanced mathematical thinking skills to solve complex problems, compared to an OECD average of just 3%,” the report said.
Hong Kong-China, Singapore, Canada, New Zealand and Japan were the next best performers.