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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.

Courtroom dramas are a news staple these days and Brazil has its fair share.

The Chico Mendes trial and the trials of those accused of murdering US sister Dorothy Stang, as well as that of the police involved in the massacre of landless peasants and inmates at Carandiru, captured the nation’s attention.

None, however, managed to work Brazilians into a fury like last week’s trial of Alexandre Nardoni and Ana Carolina Jatobá, the São Paulo couple accused of killing Nardoni’s 5-year old daughter Isabella by tossing her out a sixth floor window in 2005.

I wrote a piece on this for the Christian Science Monitor’s Global News Blog at the weekend but admin and personnel snafus meant it was never put online. (This is an increasingly common result of the widespreads cuts in the media business; there simply aren’t enough editors to handle all the copy.)

Here’s the piece in its entirety, a little late but still relevant.


SÃO PAULO, Brazil – The trial of Alexandre Nardoni and Ana Carolina Jatobá, the couple accused of throwing Nardoni’s 5-year old daughter Isabella to her death from a sixth floor window, has been all over the news in Brazil this week.

Unusually in today’s celebrity obsessed world there are no famous people involved. This is not Brazil’s version of the OJ Simpson trial. There’s just a dead child from a lower middle class suburb of São Paulo and a media frenzy.

The trial began Monday and has dominated public life here not just because of enormity of the offense but also because it brings together crime and children, two of the topics Brazilians feel most strongly about.

Every country has their own fallback subjects, the ones that people commonly talk about in offices, over lunch, on buses and trains. In Britain, it is the weather, while in the US it’s celebrities and television (or, more and more, technology).

In Brazil, two of the most talked about issues are crime and children. Crime is a hot button issue because Brazil is a violent society. There are perhaps 20 million illegal guns in circulation and although the murder rate is falling it is still one of the highest in the world for a country not at war.

Assaults and burglaries are common and many people live in fear. More than half of those living in São Paulo have been victims of at least one kind of crime, according to studies published last year, with one-in-five having been assaulted a gunpoint and one in six having seen their house burgled.

When it comes to children, Brazil is no different from many Latin American nations in that young ones are treated like little gods. Newcomers can be shocked how Latins revere – and defer to – their children.

(Once in Mexico City I offered my seat on the metro to a mother with two tearaway kids and an infant in her arms. When I got up, the bedraggled woman gave her seat to the boys and remained standing. I felt like removing them by the scruff of the neck and telling their mother to take the weight off her feet.)

So while mistreating a child is a heinous crime in any country it’s perhaps treated with even more outrage in Brazil.

And the outrage surrounding this trial has been huge. Hundreds of people gathered outside the courtroom this week, some traveling hundreds of miles just to be there and shout abuse. Many carried tshirts and placards with Isabella’s picture. Almost all of those screaming for justice had already decided on the couple’s guilt. One man even attacked their lawyer.

When the jury’s decision came in late Friday night the crowd got their wish. Both defendants were found guilt of aggravated homicide. Nardoni was sentenced to 31 years in jail, Jatobá to 26 years.

It’s been an unusual couple of weeks in that I’ve spent most of my time preparing stories to go in the paper during that quiet period between Christmas and New Year.

But I was called onto a breaking story Friday and wrote this piece about the case of Sean Goldman, the 9-year old kid who is the subject of a tug of war between his American father and his late mother’s Brazilian family.

(A broader summing up of the case can be found here in this excellent AP story.)

My piece is more about the view from Brazil and is a counterpoint to a more US-focused article from my colleague in Miami, who compares this case with the Elian Gonzalez episode in the US and the reactions of the respective governments.

The main message I wanted to hammer home was that although the Brazilian justice system has worked, it has worked painfully slowly.

Brazilian lawyers, echoing their Foreign Minister, stress this case is a matter for courts to decide – even though Brazil is a signatory to the Hague Convention, under which countries agree to return kidnapped children within six weeks.

They reiterate that courts have merely done their job in responding to the actions and appeals that have drawn the case out for more than a year. The problem, though, is when the wheels of justice grind as slowly as now, the path is perverted.

As the saying goes, Justice Delayed is Justice Denied.

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