A SPANISH bank equity scam has been discussed in Parliament, following a Labour MP’s call to Rothschild bank to fulfil their ‘moral responsibility’ to customers now living in fear of extreme poverty.
Huw Irranca-Davies, MP for Ogmore in Wales, accused the international banking group of luring British pensioners living in Spain into investing in equity schemes, with many now penniless.
Following the debate, Conservative Treasury minister Sajid Javid vowed to ask Rothschild about the fate of more than 100 victims of the Equity Release scheme.
Antonio Flores, director of Lawbird legal services in Marbella, said: “At a very late stage in their lives they have technically lost everything, they have that feeling of having been cheated, of shame.
“I don’t know if Rothschild did it purposefully but they certainly got it wrong, I think they had very bad advice.
“In my opinion not assuming liability is as bad as having deliberately cheated.”
Mr Irranca-Davies argued argued pensioners were convinced to gamble their life-savings and homes on two ‘enticing but ultimately flawed pretexts’.
“I say to Rothschild, you have badly deviated from your core values, badly served your brand and reputation, badly served people who regarded themselves as your clients,” he said.
However, Mr Flores said he believed those affected had a ‘very high probability’ of a successful outcome.
The majority of banks involved were Scandinavian and based in Luxembourg, including Dankse bank.
Customers were told that by investing a loan secured against a mortgage on a property in Spain they would receive a small additional income to their often limited pension.
They were also told that by registering a mortgage on this property, they could avoid inheritance taxes for their children.
Rothschild is a global financial advisory group and one of the largest financial advisors in Spain.