Tag archives for Equity Release Victims Association

Landsbanki Misleading Advertising Case Due to be Filed

Share

Lawyers acting for Landsbanki victims are due to file a misleading publicity case against Landsbanki Luxembourg S.A., Lex Life and Pensions S.A. and Offshore Money Managers Correduría de Seguros S.L.

The case is based on the extensive fraudulent publicity that all three entities issued when offering the product known as ‘SITRA’ (Spanish Inheritance Tax Reduction Scheme), ‘Capital Insurance’ or ‘Equity Release‘.

According to the documentation that lawyers hold, the following has been established:

  • The product was devised as a means to reduce, or eliminate completetely, Spanish IHT. We now know this is not only untrue, as it proposes customers to defraud the Spanish Tax Office.
  • The product was also designed to potentially produce an income, it being the difference between the return on the invested asset, minus charges and expenses, and the cost of servicing the loan. This was just one possibility, the other more likely one being total loss.
  • The advertising stresses prominently the benefits of the product but omits the risks involved -or if at all features these in small print- namely the loss of the property and further.¬†

Landsbanki was extremely successful in attracting new customers by using its main feature: reduction of Spanish Inheritance Tax. Lex Life & Pensions did too.

And Lex Life & Pensions used the name top Spanish firm Cuatrecasas to push sales, by admitting the following:

this product has been ellaborated in conjunction with top law firm Cuatrecasas

Lawyers are awaiting a formal response to a letter sent to Cuatrecasas but we can anticipate the response: “we deny any involvement and do not want to know anything about this product”

The case is to be filed with Courts in Malaga and will focus on the defendants’ advertising.

As for the role of OMM, its responsibility is two-fold:

  • Active participation in the promotion and marketing of the product, generously remunerated with an introduction commission and further, by receiving regular trail commissions (as is the case with Jyske bank too).
  • Attribution of joint responsibility to any media outlet used to promote and market a particular product or service¬†(rulings by Madrid Appeal Court rulings 17/6/2008 and 30/9/2009).

A case for misleading publicity narrows down the scope of the dispute as it confines the Judge to rule on whether the advertising is/isn’t misleading, without giving any room for further interpretation (i.e. namely misselling: whether customers could and should have sought further advice, whether they were savvy investors or suitable for the product, whether it was a high risk speculative product known to the public etc.).

OMM has declined to come forward to assist claimants, ignoring letters from lawyers inviting them to participate in this case as witnesses, and yet their fraudulent advertising is still today available to the public.

Equity Release Income Illustration

Share

If Inheritance Tax savings was not enough enticement -or more accurately, as Steve Dewsnip tells us, it would save your home from the predatory Spanish Taxman– , the perfomance of the deal was presented as being so good that you would end up having that extra generous income by putting “your bricks to work for you” (Allan Graydon).

The attached is a brutally misleading illustration that, additionally, omits any reference to adverse market movements.

But the banks rationale was different: why would you want to put your customers off buying into the product if it was working for the bank? At the end of the day, if it all went tits up banks would argue that the customers could and should have “gone elsewhere to get accurate advice” (Nordea Bank Ipse dixit).

Rumour has it that for someone somewhere in the mountains of South Cordoba…it did actually work for a few months. The ERVA investigations teams are keen to meet this endangered specie…

(the attached was given to a Rothschild customer).

 

And the winner is…Sydbank

Share

Sydbank is the worst Equity Release offender, by far, in terms of lack of regulatory compliance for the laws in Spain.

The list below shows the shocking contempt displayed¬†by Sydbank for the host country’s laws when offering the tax-evading Equity Release to British unencumbered properties owners living in Spain:

  1. Never registered in Spain, at all, to provide any service, banking or otherwise.
  2. Opened office in Fuengirola without authorization.
  3. Used unregulated unqualified agents to capture customers.
  4. Sold tax-cheating products pretending they were fully regulated for Spain, when this was totally untrue.
  5. Offered customers Belize-based companies to conceal the investments from the Spanish authorities, a la Lord Ashcroft, operating from the Sydbank Switzerland base, but made it out to be that it was the customer who was instructing the bank to do so.

All of this has already cost them dearly: the Sydbank branch who signed the attached last page of the risible missive was closed down following the spate of damning articles, openly accusing the entity of tax evasion, published in the Danish press.

 

JYSKE BANK GIBRALTAR ACCUMULATES ADVERSE COURT RULINGS IN SPAIN

Share

Jyske Bank Gibraltar is one of those financial entities that we can say has been, for some time now, sailing a little too close to the wind.

The latest scandal in the making is the proposed eviction of a Spanish resident lady, called Anne (pictured), who somehow managed to become eligible for a loan of ‚ā¨550,000 after presenting her credentials to the bank: survivor of several cancer operations (the last one 2 months prior), jobless, resident of Spain, never registered with the Social Security and with a meager ‚ā¨150/week pension from Belgium.

This form of predatory lending is certainly unknown in Spain where mortgage scandals generally relate to 120% loan-to-value mortgages, abnormal assessment of debt-to-income ratios of borrowers and other similar excesses.

Jyske has done that and more: they have lent where there was absolutely no physical possibility to repay (so much so that the Anne could not even cover the first repayment), have used an illegal company in Spain to assess its value (i.e. not registered with the bank of Spain) and moreover, have been happy with a valuation on the property next door because they could not find keys to the one transacted! Such a display of Nordic efficiency so that they could give out ‚ā¨550,000, seemingly in desperation to lend, to a convalescing jobless 62-year old lady (66 now) who already owned her little apartment outright -mortgage free-, and who thanks to Jyske would enjoy the benefits of a 35 year repayment plan (last repayment when she reached 97).

When Anne‚Äôs ex-husband found out what Jyske, and his ex too (!), were up to, he tried to prevent the mortgage loan from being signed by addressing a letter to Mr. Christian Bjorlow, Jyske’s Managing Director at the time of ¬†the infamous event, who rhetorically¬†(or rather sarcastically we would add) responded by manifesting, in obvious incoherence with the financial status of the borrower, that:

‚ÄúNo responsible lender should grant a loan unless it reasonably believes the borrower has the ability to repay it‚Ķafter carefully considering the facts along with the supporting documentation available to me, I am of the opinion that the bank has acted with due care and attention to this matter and consequently, I am unable to withhold your claim.‚ÄĚ

Luckily, the Spanish Government yesterday passed a law stopping dangerously immoral people like Bjorlow from evicting vulnerable people like Anne.

Jyske’s historic relationship with Spain has traditionally been bumpy, to say the least. In 1994, they closed their Spanish branch for reasons we do not know. In 1999, they re-opened the branch with a view to serve the diverse expat communities investing heavily in Spanish property only to order its closure again in 2007, so that they could operate from the safety of Gibraltar it appears (cross-border service), and on the 26th of April 2010 they were fined by the Bank of Spain with 1, 7 million Euros for failing to comply with Spanish anti-money laundering provisions.

A while before, in 2004, the Supreme Court ruled against them by upholding a Court of Appeal ruling that ordered Jyske to pay an ex-employee compensation (‚ā¨70,000), whose loan had been wrongly foreclosed because, even though it was agreed that whilst he worked for bank he would enjoy special terms and conditions, failing to pay higher interest when he left was not agreed as a “foreclosureable” default. As it happened, he had opted for a job with another bank which, clearly, was not of the liking of the bank. According to the Court, Jyske was found ‚Äú‚Ķlacking good faith when exercising its rights under the mortgage loan contract‚ÄĚ.

And not that long ago either, the Malaga Court of Appeal ruled that Jyske was not the owner of a company, Valiant Holdings, whose shares were pledged in guarantee of a loan repayment on a Spanish property. In spite of this, they chose to flatten the gardens, cut out the windows and close them up with wooden planks.

Last year, the Olive Press stepped in to help a victim of rogue trading and as recently as the 4th of October 2012, the Advocate General issued an opinion to the European Court of Justice, as requested by the Supreme Court on occasion of the appeal filed by Jyske Bank Gibraltar to the imposition of the 1, 7 million fine, to the extent that Spain has the right to exercise its right to supervise any bank operating in Spain, in respect of anti-money laundering provisions and any other matters of public interest, regardless of whether they are, or not, operating via a branch.

And we would not like to finish this post without a reference to what is going to be the very latest scandal to soon hit the headlines: the Equity Release tax-evasion fraud perpetrated by Jyske Bank Gibraltar.

 

 

Bank of Spain Says Nordea and Nykredit Break the Law

Share

 

The Bank of Spain has confirmed that Nordea Bank S.A. and Nykredit Realkredit A/S are abusing the Spanish legal system by selling mortgages and other bank products from their Representation Offices (Oficina de Representación) in Spain.

Because whilst both entities are registered with the Bank of Spain to carry out most of the banking activities throughout the UE via cross-border transactions, they are illegally selling banking products using their representation offices, for which article 10 of the Decree 1245/1995 provides that:

‚ÄúOffices of representation will not be able to carry out credit operations, accept clients funds or offer financial intermediation, nor any other type of banking services, limiting the scope of their work to informative or commercial activities in respect of banking, financial or economic matters.‚ÄĚ

Jesper Hertz, the man fronting Nordea Representation Office in Marbella and whose picture features on this site, has probably lost count of how many fraudulent equity release mortgages he has personally sold, through his Marbella office, and signed, via Spanish Notary Publics throughout Spain, despite this being strictly forbidden to him.

The reason they would do this is that it was cheaper for obedient Jesper to run around hunting potential victims and signing them up at the Notary offices, than to have Claus Jorgensen or Anders Woideman fly out to Spain to do the dirty job. They have been operating in this manner since 13/03/2002.

Christel Mark Hansen, working from the Nykredit Realkredit A/S Representation Office in Marbella, should have not lost count of the number of British clients she has personally advised on in respect of fraudulent equity release product as she personally visited their homes, would have a glass or two of wine and then sell them, with voracious appetite, very large non-status mortgages despite this being strictly forbidden to her.

The reason for this is that sweet-looking Christel would have hardly come across as someone selling a life-destructing financial product, in contrast to the Sydbank-tax-evading-thirsty-Swiss-based co-conspirators. They have been operating in this manner since the 14/09/2004.

And Danske Bank International, also running their activities supposedly from Luxembourg, chose to set up a bogus “Representation Office” in Fuengirola to, as with competitors Nykredit and Nordea, sell and execute Equity Release Mortgage loans via the servile services of Henrick Hjerrild Hansen and John Lundskov Larsen. They have closed their office on the 15/01/2009.

So much for the Nordic Values…

The ERVA files a claim with the Madrid Courts (Audiencia Nacional)

Share

The ERVA has filed a criminal complaint, with date of¬†7th of November 2011,¬†against¬†Danske Bank, Nordea Bank, N M Rothschild & Sons, Lex Life & Pension, Landsbanki, Jyske Bank, Finansbanken, Nykredit, Sydbank¬†y Swiss Life, for allegedly conspiring to defraud hundreds of retired people¬†by¬†knowingly, without belief in its truth or reckelessly and carelessly whether it be true of false, attributing specific qualities to a product known as “Equity Release”. These qualities, both proven to be wrong,¬†were that the would a) provide an income and b) allow to lawfully dodge Spanish taxes.

A press release is taking place today, at 17.30, in Marbella, where the press will be made aware of the content of the claim, which is to be posted here shortly.

Expat equity release victims take on banks

Share

The directors of action group Equity Release Victims Association stand to lose their homes Photo: Larry Lilac / Alamy

Tempted by the offer of a salary for life and an inheritance tax reduction, organisers of Equity Release Victims Association, Ian Sherdley, 69, and Euan Armstrong, 73, used their Spanish holiday homes as collateral to buy into the equity release schemes.

The schemes were sold by independent financial advisors working the expat communities along the Costa del Sol on behalf of Denmark’s biggest bank¬†Danske Bank¬†and¬†Nordea Bank SA.

They were told that if they took out full mortgages against the value of their Andalucian homes, which were fully paid for, and then gave the money to the bank to invest, their inheritance tax liability would be reduced and they’d receive a small lump sum, as well as a monthly return on the bank’s investment which would cover the cost of the remortgage and provide a small salary.

Mr Sherdley, from Lancashire, and Mr Armstrong, from Scotland, followed the advice only to be later told by their Nordic Banks that the investments had gone badly, the remortgaged money had been lost and their homes suddenly belonged to the banks.

It is thought that there could be hundred of expats in similar positions across Spain and France.

A Spanish court has so far suspended Danske Banks’ foreclosure and repossession order, while a decision as to how the cases will proceed is expected in the near future.

According to Mr Armstrong’s lawyer, Antonio Flores from¬†Lawbird Legal Services, the schemes were mis-sold, bearing in mind it is illegal to knowingly indebt yourself in order to reduce your inheritance tax liability.

He said: “We want to find out exactly how many of the schemes were sold, to who, and on what basis.

“As far as I can gather, retired expats were targeted because they had paid off their mortgages, so could use them as collateral and would be tempted by talk of reduced inheritance tax liability.”

Mr Armstrong added: “We encourage everyone who, like us has been sold one of these schemes to get in touch.

“Do not lie down and take this. These banks are making billions every year with your money.”

A spokesman for Nordea bank said: “We can’t comment, but we can say is that Nordea runs its business in compliance with local laws.”

A spokesman for Danske Bank said: “According to the law we cannot comment on individual customer cases nor questions related to individual customer cases. We have no comment.”

If you have a story to tell about equity release, please contact sean.o’hare@telegraph.co.uk.

Originally published on http://www.telegraph.co.uk/property/expatproperty/8759583/Expat-equity-release-victims-take-on-banks.html.

Skip to toolbar