Clampdown on finance rogues in Spain

LAST UPDATED: 26 Feb, 2012 @ 00:01
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Clampdown on finance rogues in Spain

THE EU is to investigate an ‘alarming number’ of shoddy and unregulated financial advisors  working in southern Spain.

The European Commission is to consider setting up an ombudsman to help expat victims reclaim against ‘rogue’ financial firms.

It comes after a local pressure group, that represents over 1,000 victims, sent a strong dossier of information to Brussels.

The Costa del Sol Action Group demanded action against the ‘cowboy’ advisors who, it claims, have lost their clients over 120 million euros.

“It is good news as something has to be done about this bunch of rogues,” group founder David Klein told the Olive Press.

“The current Spanish regulatory system is totally inadequate and ineffective,” he continued.

“Dealing with the authorities is a constant game of ping-pong.

“Anyone can come to Spain and be a financial advisor, they could have been selling fish before they came here for all anyone knows,” he added.

This situation could soon be coming to an end, after the Commission confirmed it was to begin ‘a preliminary investigation of the problem.’

It has asked for more information and the action group has called on all victims to write to the European Parliament outlining their experience.

“This problem is causing untold stress and heartache in the expatriate community and it cannot be allowed to continue,” explained Klein.

The European Commission is to study how investors would be able to make an official complaint against so-called IFA, or Independent Financial Advisors.

At present, there is no effective means for victims to make a complaint against product providers who work with unregistered IFAs.

The group also slammed the willingness of the local media to accept adverts from unregulated financial firms in a bid to maximise advertising revenue.

In particular it mentioned a company Offshore Investment Brokers in Estepona, which it claims is ‘not regulated or registered’.

It insisted the company was able to trade ‘collecting unsuspecting clients who are soon relieved of their money’. It gave two case studies (see one below).

The Olive Press has long been careful not to take advertising from such firms, and insists on advertisers providing a full business address, registration numbers and contact details.

“We try really hard to only work with genuine businesses and would really welcome the introduction of an ombudsman,” said publisher Jon Clarke.

“We fully support the efforts of the Costa del Sol Action Group as there are too many grey areas and not enough regulation.”

Under current legislation, UK-based IFAs can apply for a ‘passport’ from the Financial Services Authority (FSA) to operate in EEA countries, including Spain.

However, this is only an indication that the firm is operating to FSA standards and does not mean that the firm is regulated, with complaints being the responsibility of the Spanish regulator.

This has led to some IFAs abusing the passporting scheme by misleading investors into believing that they are FSA regulated.

One financial advisor, Richard Alexander, told the Olive Press he was pleased with the moves.

“Bring on the review,” he said.

“I have seen too many sad stories of people being turned over, badly advised or grossly over-charged.

“It is the reason why I decided to set up my business here having got proper authorisation from the FSA in the UK.

“It is entirely possible to provide professional, quality advice without the client losing out.”

CASE STUDY: We’re in danger of losing home
“My wife and I are in danger of losing our home after being sold a product known as a ‘turnkey mortgage’ on our 450,000 euro property.
“We were never informed of the risks, only that it would help negate inheritance tax, provide a small annual income and a lump sum after five years, even though the ‘mortgage’ was for 10 years.
“When I tried to back out the advisor said it would be a big mistake, but now, the value of the investment has dropped significantly in the last five years and if it doesn’t return in value over the next five it will be disastrous.

33 COMMENTS

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  1. We have set up a website so you can check out the adviser and the investment before you buy and if you already did invest and you think you’re in trouble talk to us. We are a consumer protection not for profit organisation, specialists in these financial services issues.

  2. Is the firm he represents passporting into the UK from the EEC? or is it a UK authorised firm passporting out to Spain? Presumbably he is not on the FSA register under its registered “individal” list. But, he will have a history in the industry if he is holding himself out to be a financial adviser. These deals involve the adviser, the mortgage lender, the fund manager or packager, the fund administrator, probably a firm of lawyers, maybe a company management firm, maybe a trust structure. All these are regulated so there may be redress available elsewhere.

  3. Unfortunately for those already deceived & lost investment, any FUTURE investigation, law, regulations, etc would not be REtroactive. And those guilty IFA’s would simply declare Bankruptcy so no compensation would be reclaimed by those who lost it. A pity.

  4. This man is registered
    Richard Alexander Financial Planning Ltd TN17 1LE
    ——————————————————————————–
    Appointed Representative
    David Costa Del Sol Action Group

  5. Could you tell me please .. why we are not eligible for compensation from the Financial Bodies in UK ,when the Company we dealt with(Langtons IFA Ltd Head Office in the UK) declared they were …Legally passported and regulated by FSA,access to UK Compensation schemes,Professional Indemnity Insurance(1.000.000 per client)etc…This was also on British Chamber of Commerce and Costa del Sol Action Group Magazines. They were also verified as approved by them….how much else can a client do to satisfy themselves these IFAs are the REAL THING?? If the claims are true ,what is going on with these UK Financial Bodies??..if untrue why isnt the FSA regulating as they should and, prosecute these IFAs for fraud?? FSA fined Langtons 90.000pounds 2003/2005 and still they were passported and suposedly regulated by them in 2004!!!What is going on?? and why isnt someone doing something when Pensioners here in Spain are losing their homes due to these fraudulent and incompetent IFAs!!!!!!!!!!

  6. I am informed that the FSA regulation is limited to UK investment which must be licensed. To obtain protection it is best before signing anything to make contact with the authority with whom the IFA is registered and to get the name of the Public Indemnity Insurance Company and then ask them to confirm that you’re covered with the product and the IFA.
    We have hundreds of cases in both the civil and criminal courts. We have won one of our cases against Landsbanki re Equity Release and are awaiting the outcome of an appeal by them.
    It is for this and many other reasons that the CDSAG has now written to the Minister for the EU. I must now ask you and anyone else to direct email to [email protected] if anyone has further questions. There will be no more public communications. David Klein Costa Del Sol Action Group

  7. Interesting this. I just re-checked 526007 – Richard Alexander Financial Planning Ltd on the FSA Company Search. Spain – Insurance Mediation only.

    “http://www.fsa.gov.uk/register/firmPassports.do?sid=244634”

    It seems we have to watch out for the “Agents, sub-Agents, sub-sub Agents, and representatives” using other peoples pass-along regulation. (Frighteningly legal in Europe). Hurry up the E.U.P. !

  8. This is from the FSA
    “http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=148650”
    “http://www.fsa.gov.uk/register/firmAppRepsCurr.do?sid=148650”
    Richard Alexander Financial Planning Ltd* Y Y 526007 16/06/2010 this information is at 429142 – L J Financial Planning Ltd
    more info at L J Financial Planning Ltd WA4 6PS
    You do not have to watch out for sub agents who are qualified and registered with a company licensed.

  9. Like Angie I used Langtons and beforehand I checked as much as possible.I am now 2 frustrating yrs down the line with the FSA, having been mis-sold, with no joy and very little hope of getting any! I am being advised by the compensation scheme to try the FSA( I did that 2yrs ago!!)!!!. I can prove that Langtons were pasported into Spain by the FSA and accepted by the Spanish financial authority, I can also prove that their head office were the intermediary in ALL aspects of the investment and received the commission from the investment (as requested by the FSA). The FSA ,however, still claim that I am not eligible for compensation.Langtons are no longer trading and I even contacted the reciever for details of Langtons insurers but he tells me that he has had no response from the exdirectors and does not know who the insurers are.I also tried a no win no fee company but after sending them and the FSA enough paperwork to sink a battleship and running around in ever decreasing circles the no win people gave up. To me the FSA regulated meant what it said as did Langtons assurance that all was kosher. Each time the FSA”establishment” are contacted you get a different response from a different person and there is NO CONTINUITY (probably done to confuse the little man on the street)Unless you are a large company and have a powerful legal deparment i.e Royal Bank of Scotland your voice will not be heard. I also understand that the FSA as we at present know it will no longer be around later this year so are theFSA now playing delaying tactics with claims? I no longer have faith in the term FSA REGULATED and believe that the old fashioned ” word of mouth” to be more acceptable.

  10. Angela asked how much else can a client do to satisfy themselves these IFAs are the REAL THING? We know we can’t rely on regulators. Thanks for social organisations like the costa del sol action group who do so much. Because we need an industrial strength vetting service for consumers adrshelp has started one. Next time, get an independent check.

  11. What I can never understand is – those who are being ripped off are not teenagers, they own a computer and must know surely that you can Google almost anything nowadays. All the information you will ever need is right at your fingertips to help you make sound financial decisions yourself – on the net – what’s that you say, you have no confidence in yourself or you can’t be bothered.

    The best person to look after your money/assets is you. I breifly worked in financial services at the end of the 80s’ and saw clearly that it is heaving with con artists.

    Why don’t people realise that virtually all advice is geared to pushing the punter towards products that make the most commission for these ‘advisers’ – the classic is ‘whole of life policies’. This product has never been for the benefit of the purchaser. Never mix ‘death protection (that’s what life insurance is but how do you sell death to someone?) with investment.

    Why do people accept what someone says because they wear a nice suit and work from Banks or other swanky offices – caveat emptor/buyer beware. Of course governments could make it mandatory to teach financial common sense in school but that’s not possible because the fincial services in every country have the parasitic politicians in their pockets.

    Remember what W.C.Fields said – never give a sucker an even break – and they never do.

  12. Dear Stewart. I’ll try to explain here.

    Once Upon A time people that were honest and proud. They were brought up and guided by a strange thing called self-respect.

    They lived by antiquated ethics such as – “Don’t do to somebody else what you wouldn’t want done to you”.

    They didn’t all lay awake at night planning how they could rob their neighbours out of their life savings.

    They had much richer lives, more lasting real friends, and could walk with their heads held high.

    Many people from this period in time are still alive, but can be caught unwary if one is unscrupulous enough.

    We are back in the jungle, and you must treat everybody you meet as your potential enemy.

    Sadly, today the only advice you can give a child is: Never trust anybody, even your village Policeman.

    What a legacy to leave for our Grandchildren.

  13. John Evans,
    it’s Stuart not Stewart and what you describe is a fairy tale that never had any basis in historical fact.

    The South Sea bubble was one of the very best scams ever created and that was a long time ago and Ponzi himself worked his scam in the 1930s’.

    Have you forgotten how often banks had runs and ordinary people lost all their money. Never heard of War Bonds which the ordinary people were encouraged to be patriotic and buy and they did and got ripped off – the rich did’nt buy them.

    Never heard of all the bent solicitors who robbed their clients.

    I can remember the council estates where everyone really did leave their doors open but in those days working people did’nt have money for consumer products so there was precious little to steal and indeed their was an unwritten code of conduct.

    The Peelers were corrupt from the moment they were formed and the Met has continued that corruption right upto the present day.

    People are encouraged to save for their retirement via pensions but it is never mentioned to the mugs the horrendous charges that are heaped on those pension plans and it has always been so.

    We live in the world we live in – caveat emptor – buyer beware.

  14. Dear “Mr Know it all”(STUART Crawford)….. How wonderful it must be to live in your PERFECT world where you never make mistakes and everything goes exactly to plan all of the time but, all of your time ,is taken up with checking and double checking …just to make sure it does go according to your perfect plan!!What an incredibly boring man you must be!!!!!!! ……Unfortunately some of us mere mortals DO make mistakes and not always through any fault of our own,if you read my previous comment properly,we did check to the best of our ability at the time … Langtons were introduced by a friend,was aware of their claims for FSA regulation and Passporting and much more ,this also appeared on the British Chamber of Commerce,Spanish Web Magazine and also were on the Costa Action Group Mag.. Approved List…did as much as we thought to satisfy ourselves…again unfortunately we were not living in your perfect world so we made a very costly mistake.However i would still rather be in my world of trust for my fellow man, than yours of bigotry!!!!!!!!!!!! :))

  15. Oh Angela,
    you screwed up badly and can’t acccept that, so in your unwarranted hubris you make typically snide and inaccurate statements to try and cover that up. Bigotry – please explain, that’s a nonsensical statement. If you mean that I don’t trust lawyers/bankers/insurance agents and have no intention of paying for their lifestyles – that’s not bigotry that’s called common sense.

    I find it boring that there are so many like you keep getting ripped off.

    The FSA has been a joke at protecting the rights of ordinary people since it’s inception – what planet have you been living on for years.

    You were rec. by a friend – probably the biggest mistake anyone can make.

    Why is it that the lion’s share of rip-offs happen to the Brits and not to Germans or the Dutch – because too many of you are impressed by appearances – how many scams are successfully worked in the UK or Spain by the villains presenting ‘the correct appearance’.

    Why no comment on my logical suggestion that street smarts about money/finance should be taught at school.

    Stephen Kerbel must really hack you off as well.

    Why can’t you spend a little time studying how the system works. Nicolas Parsons believed all his life that he could’nt handle his money, so, he put all his assets into the hands of a couple of glib smartly dressed young men, who stole the lot and so in his 50s he had to start all over again and he was so angry at himself because he found that when he had to, he could understand and look after his money himself.

    Why do you use the word ‘perfect’ when you should be using the words real world.

    I find that a lot of Brits who move abroad are incredibly naive – did you really trust financial advisers and laywers back home, how could you miss the unrelenting stories,one after another about the rip-ffs happening on a daily basis and that was back in the UK – never heard of Barlow Clowes et al.

    You got ripped off because you were’nt prepared to think, study and act for yourselves.

    I’ve made some bad decisions in business because I don’t live in a perfect world but I made those when I was young and headstrong and learned from them. I did’nt have access to a world of info that is available today with a click of the mouse but I never allowed anyone to look after my money but myself.

    Finally all those like yourself – when you can deflate your bruised ego need to recite every morning before breakfast – when something looks to good to be true is probably is.

    Now I must engage with the ‘real world’ and take our lovely dogs for a walk along pleasant country lanes secure in the knowledge that no scammers are feeding off me – hasta la vista!

  16. Before you go off with your dogs I must say that your comments about Brits being naive is really unkind. We are all naive outside our fields. In my business I could eat you up, con you and walk away and you would not know it this my friend makes you naive.
    I would also stress that there are large action groups within both the French and German communities here.
    Try to be kind to those that have been ripped off, retired, sick and possibly loosing their homes. Most Sincerely David Klein

  17. Bringing this back to the subject of Ombudsman – Did you know that the new Gibraltar government intends introducing a financial services ombudsman very soon? Good news for all those who will put money in Gibraltar in the future and, it might just help people who did already. This is a cause I’m fighting for – an Ombudsman with teeth!!

  18. I personally do not have confidence in Gibraltar. Some years back we challenged the Governor who controls the Gib FSA and we as usual came up against a brick wall.
    The establishment stand together.
    David Klein CDSAG

  19. It’s been a few days, I’ve been busy – but David, this whole Ombudsman thing started with a great one, the Insurance Ombudsman in the 1980s. So great that it was taken as a model and we now have them everywhere. When Gibratlar and Spain have one if they have real teeth they will make a real difference. Maybe they won’t grow teeth – but give them a chance.
    … and Stuart – I don’t believe you either. I’ve been fighting financial crooks for 20 years and I know I can still be caught. If I didn’t think I could be, my guard would drop and I’d be ripe for picking. We can’t stop the rip-offs. There are so many feeding off our money there are always going to be skimmers somewhere in the pipeline.

  20. With respect I do not think we can compare an Insurance Ombudsman with a Member of the European Parliament. I suggest you hve a little read up on their function.
    People who have suffered being scammed, ripped off an stand to loose their homs do not have time to wait for Gibraltar or Spain to appoint an Ombudsman. I really do not know where you are coming from.
    Daid Kloein

  21. Dear Stuart. Thank you for your words of wisdom. I am entirely sure that everyone welcomes your positive, refreshing attitude, and your blunt, but effectively conveyed, ‘I told you so’. So too am I sure that everyone has latched on to a key phrase that you repeated: if it appears too good to be true, it generally is.

    There is another saying, Stuart, that might well be apt here: if you have nothing nice to say, do not say anything at all.

    Perhaps rubbing salt in the wounds of people who, for whatever reason,find themselves in dire straits, could be left for another day, and perhaps be directed at people who are not tearing their hair out, wondering whether they will manage to keep their roof over their head for another year.

    Freedom of speech is grand, but not when you use it as a stick to mock people with. A little respect, please.

    Best

    Jane

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