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British pensioners protest over 'bank scam' that saw them lose all life savings

The victims protest outside the court in Marbella on Wednesday. :: Josele-Lanza
The victims protest outside the court in Marbella on Wednesday. :: Josele-Lanza
  • Foreign residents who remortgaged their homes via failed Icelandic bank, Landsbanki, gathered in Marbella at the start of a class action

A protest was held outside a Marbella court on Wednesday by a group of foreign pensioners, most of them British, who lost large amounts of money after a bank sold them a financial product that turned out to be “toxic”.

Some 200 retirees, most of whom live on the Costa del Sol, have come together to coordinate legal action against Landsbanki, an Icelandic bank that used to have offices in Marbella and which collapsed in 2008 during the financial crisis.

One affected couple are the Bowdens, a former carpenter and teacher, who had chosen to retire to the Vélez-Málaga area from the UK.

Home repossession

They sought a loan of 6,000 euros for urgent cancer treatment but instead were offered a complicated financial product that involved having their home remortgaged and most of the loan going into a supposedly high-earning investment fund. All the money was lost and with costs the couple now owe 300,000 euros and have also lost their home.

Although the case of the Bowdens is the most extreme, many others across Spain were caught out by the product the bank was offering and the group of almost 200, making up most of those affected, have come together under local lawyer Ignacio Infante to organise joint legal action. So far the group have managed to stop around a dozen home foreclosures.

On Wednesday the victims of Landsbanki launched a class action counter claim in defence of one of their members in Marbella. Around 30 of them made a noisy protest at the doors of the court during the hearing. Some had travelled a long way and spent the night before in a hotel nearby. Placards in English and Spanish read, “Victims of Landsbanki seek and demand justice”.

One of those affected, 71-year-old Lesley Milton, originally from London but now living in Alicante, couldn't hide her anger at a situation which has seen her also lose around 300,000 euros. The same feeling was expressed by fellow-Briton, John Kohli. “We want to get our money back. We want justice,” they said outside the court.

Class action

All of them have launched a class action against Landsbanki for making them mortgage their homes and using most of the money from the loans to invest in funds, going on to lose them all their money.

The financial product that caused so much unhappiness was called Spria II or Sitra II and was sold in Spain by Lex Life via Landsbanki (or its subsidiary in Luxembourg). According to Ignacio Infante, the details of the product were very complicated and the bank didn't carry out any analysis or questionnaire to understand the profile of the person investing, nor did they provide any information on the product.

Lawyers for the bank and its liquidators have argued that it was Lex Life that sold the product and that Landsbanki was an intermediary.