Lawyers acting for equity release victims are preparing claims to submit to the different regulators. The following letter has been forwarded to victims of these disgraceful banks:
It has now been 3 weeks since the gathering at the Malaga Tax Office, and we now wish to move forward by writing to the Spanish regulators to obtain a formal opinion on the specific products entered into, with a view to use it in a civil court to obtain a ruling declaring the contracts null and void.
The regulators in question are the Bank of Spain, the CNMV (Comisión Nacional del Mercado de Valores, Financial regulator) and the DGS (Dirección General de Seguros, Insurance regulator), in their respective areas of jurisdiction, since the equity release product is a complex contract (mortgage loan and investment product) that involves activities that fall within the Banks of Spain and the CNMV/DGS remit.
Crucially, the advertising campaign based on tax advantages devised and put into operation by these entities is, without a doubt, the most serious of the breaches, as not only does it promote tax evasion but also, it is based on a false assumption: that you can mortgage your home to minimize certain taxes.
Additionally, we will request an opinion on the following regulatory breaches and their implications:
- The sale of a complex financial investment product that would have required prior acceptance by the CNMV and the DGS, particularly where the proceeds of the investment were not available but created by means of a mortgage loan.
- The extensive use of financial advertising that creates a feeling of “no risk”, projecting messages of calmness, safety and tranquility. This includes even pictures of happy pensioners. Also, failing to indicate the risk in a clear, concrete, simple, transparent and honourable manner.
- The offering of both a mortgage loan and an investment product to pensioners, owners of retirement homes with minimal income (this is what is called as “adequacy” of the product to the risk profile of the client).
- The sale of these products through a network of unregulated unregistered advisors.
It is important to note that the Spanish regulators don’t necessarily know that the above have taken place, unless they are told. In the UK, the regulator (FSA) Consumer Director says in their website:
“If you spot something you think is misleading, we’d like to hear from you. Don’t assume that we’ve already seen it as it is impossible for us to monitor all the adverts and marketing material that is produced. Your feedback will help us protect you.”
As indicated, the aim of this action is to obtain a pronouncement by the regulators where it is established that the financial entities breached substantial regulations and principles, and deceived and confounded their customers. A further aim will be to pursue an enforcement and disciplinary action that could lead to a fine, public censure or, in the most serious cases, cancellation of the firm’s authorization. Once in possession of this report, that is to be based on each individual equity release contract, we will file an action to attempt to void the contracts in the Civil Courts.
