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.