3 Aug, 2011 @ 10:29
2 mins read

Expat goes up against Denmark’s biggest bank in a bid to save his Malaga home

AN expat is taking Denmark’s biggest bank to court after it convinced him to use his two million euro Malaga home as collateral against an equity release scheme that now threatens to leave him penniless.

Euan Armstrong, 73, who lives in Marbella, was initially lured in by the false hope he could reduce inheritance tax for his two daughters – who would eventually be liable to pay Spain’s top rate of 34 per cent – and enjoy a salary for life.

But Armstrong, originally from Scotland, now faces losing his home.

“The whole case is a mess of illegal contracts, bad investment and a loss of client’s money in spite of Danske Banks huge profits,” said Armstrong.

“We must stop these banks stealing our money.”

Armstrong claims he was convinced by three separate Danske Bank employees in the Mijas branch that taking out a one million euro mortgage loan against his home would reduce his daughters’ inheritance tax liability by half.

Within the plan Danske Bank was supposed to use 850,000 euros to invest in bonds, Swiss Francs and Euros with the ‘profits’ being used to pay off the mortgage, while a 150,000 euro lump sum would be given to Armstrong as equity release.

But Armstrong added: “After the first year I realised that they had lost me 18,000 euros. For the next five years Danske Bank continued to lose money and in 2009 I was told by an account manager for Danske Bank in Luxembourg that I should sell my property and pay the bank back the 650,000 euros they had lost.

“I refused, so in November 2010 Danske Bank issued a foreclosure on my house and also a repossession order through the local court due to take place last month.”

Fortunately for Armstrong, his lawyer Antonio Flores from the Marbella based firm Lawbird – who is also filing eight separate complaints against various Nordic banks on behalf of expats who bought into similar plans – stepped in and obtained a court ruling suspending the repossession.

According to Flores it is actually illegal to indebt yourself in order to reduce your inheritance tax liability, but there are likely hundreds of people who have fallen victim to this scheme.

“This type of product, peddled by unauthorised agents under the auspices of supposedly reputable banks to mostly British pensioners, is becoming more and more common and should be avoided at all costs,” he explained.

And Armstrong added: “The Judge in Coin Court has accepted that the charges of criminal intent are correct, in spite of their lawyers saying it was not correct as someone else had tried a similar case and lost and had to pay 500.000 euros to Danske Bank, who had lost their money in the same way.”

Armstrong has now been forced to rent out his home and move in with his daughter and resume his former job as a yacht captain in order to raise legal fees.

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.”

The investigation continues.

Wendy Williams

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  1. Danske Bank offering 34%?

    I thought this happened only with pyramidal schemes via Internet.
    And now we are wondering about what is happening. Hedge funds profiting on people like this expat. Profiting, if they are lucky.if not, well, it´s not their money.

    Glod bless our politicians, stating the european banking system is solid and trustworthy? Finance people may relax&enjoy (never a bet expression). They know taxpayers will take care of the mess, as usual while they party in the Caimans (the would-be´s in Ibiza).

  2. There is an old saying ” if it looks too good to be true then it probably is ” I suggest that in future Mr Armstrong should be aware of the risks involved before committing himself to such a dubious scheme, a very expensive lesson learnt………………………….


  4. Seems like Mr. Armstrong made some mistakes – but he made the right decision to have Antonio Flores of LAWBIRDS Abogados in Marbella, represent him. They are representing one of my friends in Torrox and winning each step of the way. Excellent law firm.

  5. And what should we think about the behaviour of a danish bank in Gibraltar. Despites an explicit written warning not to allow a mortgage based loan to an unsolvent person, family of the undersigned, 2 months later, they acted as a genuine pawnbroker, not verifying IR, properties or income whatsoever to be sure of the service ability of the lender. They couldn’t as there was no single document to verify. So now they want to repossess.

  6. Thank you Olive Press for printing this story and allowing the innocent to see what can happen if you are not careful. Even if you are trying your best to allow for a way to avoid your heirs to pay such an iniquitous tax and be told that your investment CANNOT LOSE and all profits go to paying the costs and the excess will be paid to you as an income each year. So where is the SCAM. Its only when the bank account managers start to lose the money by bad investments each year that you become worried. Denmark’s largest bank DANSKE who made billions of euros over the last seven years lost all my money.

  7. Unfortunately as we discover,
    who said Bankers are in top 5% for intelligence & honesty?

    After all, they INVENTED terms like: Bailout, Too Big to Fail, CDO’s, Federal Reserve Bank (all private banks!) European Central Bank, $Billions in Bonus while Bank LOSES $Billions… never visit a Bank AFTER you’ve had lunch!
    ad nauseum

  8. If Dirk de Witte would like to contact me through [email protected] I will introduce him and anybody else who has been scammed, to the EQUITY RELEASE VICTIMS ASSOCIATION (ERVA)m where we can build a very strong case for the banks involved to pay back the money they have lost. We intend to lobby through British Consuls, European Parliament, European Court, All Ombudsmen of the countries concerned. We intended to ask the Press to help us by exposing these banks and their incompetence which is so serious that the Court in Coin has considered it to be criminal and has raised an action against four employees of Danske Bank, Copenhagen and Luxembourg. So we are in hot pursuit! Feel free to join us,

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