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British expat to lose Spanish home to banking scam
| Published: | 9 Mar at 6 PM |
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A British pensioner living in the Costa del Sol is about to be forced out of her dream retirement home after falling foul of an equity release scam operated on behalf of the Icelandic bank Landsbanki.
Due to a decade of coverage in online and offline media reducing the risk of being scammed, the presence in popular overseas retirement havens of unscrupulous financial advisors is now well-known and understood. However, in 2005, commission-hungry so-called IFAs had the field to themselves and many unsuspecting expats were caught in their nets.
One such is Wendy Peeling who, in 2005, was sold an equity release scheme banned in the UK since 1990 but heavily touted in retirement havens until early in the new millennium. The schemes encouraged older expats to borrow the entire value of their properties and invest the cash via deposits in overseas banks. The returns gained, they were told, would cover an income for life as well as paying interest due on the loan.
Once the 2008 financial crisis unfolded, it took down a number of international banks including Landsbanki, leaving thousands of expats with unmeetable interest payments and no capital. Ms. Peeling owes €322,000 on her villa, which is now valued at €300,000. Even if she could sell it, she has no means of covering the remainder of the debt, and is now awaiting a court date, having engaged lawyers to fight for her rights.
Landsbanki itself is facing fraud charges in the French courts, whilst its lawyers are also accused of a string of offences including money laundering and tax evasion. Even so, the Spanish legal system seems not to have taken any notice of the fact that a French criminal court has ordered that the bank be charged and tried over its sales of equity release schemes both in France and in Spain.
Due to a decade of coverage in online and offline media reducing the risk of being scammed, the presence in popular overseas retirement havens of unscrupulous financial advisors is now well-known and understood. However, in 2005, commission-hungry so-called IFAs had the field to themselves and many unsuspecting expats were caught in their nets.
One such is Wendy Peeling who, in 2005, was sold an equity release scheme banned in the UK since 1990 but heavily touted in retirement havens until early in the new millennium. The schemes encouraged older expats to borrow the entire value of their properties and invest the cash via deposits in overseas banks. The returns gained, they were told, would cover an income for life as well as paying interest due on the loan.
Once the 2008 financial crisis unfolded, it took down a number of international banks including Landsbanki, leaving thousands of expats with unmeetable interest payments and no capital. Ms. Peeling owes €322,000 on her villa, which is now valued at €300,000. Even if she could sell it, she has no means of covering the remainder of the debt, and is now awaiting a court date, having engaged lawyers to fight for her rights.
Landsbanki itself is facing fraud charges in the French courts, whilst its lawyers are also accused of a string of offences including money laundering and tax evasion. Even so, the Spanish legal system seems not to have taken any notice of the fact that a French criminal court has ordered that the bank be charged and tried over its sales of equity release schemes both in France and in Spain.
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