Duped UK expats in Spain win court case against fraudulent Danish banks

Two Danish mortgage providers have been savaged in a Spanish court for illegally operating and scamming British expats.

Financial institutions Nykredit and Sydbank, both providers of property re-mortgages to mostly British expats, have been savaged in a Spanish court for conduct which the judge described as ‘dishonest and irregular’. The verdict resulted in a middle-aged couple who’d fallen for Nykredit’s pitch and re-mortgaged their home having the loan declared null and void as well as being awarded 462,000 euros in compensation. The judgement came just in time to prevent the property being auctioned as a foreclosure.

The couple were persuaded to re-mortgage last year as part of an inheritance tax avoidance strategy, with Sydbank and Nykredit luring the expat couple into an investment referred to as a Spanish Equity Release Package. The so-called loan came with an investment facility and has now been cancelled as null and void. According to the judge, Nykredit was not authorised by the Danish regulator to offer mortgages or investment loans within Spain, and Sydbank and its Fuengirola office also had no authorisation to operate in he country. Finally, the judge described both financial institutions as ‘clandestine operators’.

In a breakdown of its decision, the court stated that it had ‘reversed an unjust Court of First Instance ruling and granted relief to two British pensioner victims of the SERP package peddled by Sydbank and Nykredit and sold by their offshore money managers’. In addition, the court described two witnesses for the defence as being ‘unreliable and openly untruthful', and cited the defendants’ forensic expert conclusions as ‘grossly biased in favour of the lender’ as well as ‘ignoring the fundamentals of contractual arrangements’.

According to local media, the couple weren’t the first to be scammed by the two Danish banks and their hangers-on. Barry and Maria Gill were sold a fraudulent equity release scheme masquerading as a re-mortgage by local expat financial advisor David Driver. The reasons were the same, with the re-mortgage sold as a legal way to avoid Andalusia’s punitive inheritance tax. The couple lost ownership of their 1.2 million euro villa, and joined many others who’d been financially decimated by the scam. The latest judgement at least means they and other victims will finally get their day in court, but the judgement is a warning to newly arrived expats in Spain to avoid expat financial advisors at all costs.