Drowning in abusive Insurance costs (+Start your claim)

by Legal editorial team
Hits: 345

Drowning in costs is one of the consequences of the unfair practice of Spanish Banks of 'forcing' insurance costs (Life insurance, Mortgage repayment Insurance) upon the borrower.

Banks have for years been pressure selling expensive insurance policies to those seeking a mortgage to purchase a property in Spain.

Most bank staff have pressured borrowers, by insisting that the policy was 'a requisite' to obtain the mortgage, with most borrowers being unaware that they could shop around and find cheaper quotes from insurance companies.

The only insurance that a bank can insist on linking to a mortgage is buildings insurance!

Borrowers were incorrectly told that Life insurance was mandatory and the Banks then imposed a particular insurer (usually a part of the same company or financial group) on the borrower.

In most cases the 'salesperson' managed to tie the borrower into paying the premiums for the full term of the policy simultaneously with the mortgage agreement - sometimes out of the amount borrowed.

An example: A 20 year mortgage agreement with life insurance at premium of €1,000 p.a..

The bank lends the agreed capital mortgage PLUS an extra €20,000 which is added to the total (sometimes with interest charged on the basis of a personal loan).

This is the “one-off financed premium” which means that the borrowers pay the premiums for the whole term of the mortgage, up front, with a loan.

Most borrowers have not been properly advised of what they were agreeing to, or the financial consequences.

In many cases the borrower was not made aware of the financed insurance premium, as it was practically hidden within the small print of the contract - which could not be read by foreign borrowers.

Our first legal claims began passing through the local Spanish Courts in mid-2015.

The rulings passed were all in favour of the claimants/the borrowers.

The Banks must cancel the policies and return the one-off premiums paid for the term of the mortgage yet to elapse (for example a 20 year insurance policy signed 5 years ago would have 15 years remaining, therefore the bank would have to return the premiums for the 15 years yet to come).

Some Banks did appeal the first instance judgements.

The Courts of Appeal have thus far maintained the decisions of the lower Courts.

Related blogs

01 of 22 About Abusive mortgage clauses - Spanish Legal information

02 of 22 About The Great Spanish Mortgage Scandal!

03 of 22 About Spanish banks forced to pay billions in compensation to borrowers

04 of 22 About Making your claim - the process and cost

05 of 22 About Key information you require about your past and future borrowing from Spanish banks

06 of 22 About Dissapointment, that the floor clauses procedure leaves much to be desired

07 of 22 About Briefly, your right to reclaim

08 of 22 About Eaten alive - by abusive mortgage 'set up' costs.

09 of 22 About Floor-clauses - 'clausula suelo. - a history

10 of 22 About Lifetime Loans or Reverse Mortgages in Spain Explained

11 of 22 Advice to Struggling Mortgage Borrowers in Spain

12 of 22 A warning about Spanish Mortgage Loans: Beware of Abusive Clauses – 8th January 2012

13 of 22 An overview of Spanish Mortgage Loans: An Overview – 21st February 2012

14 of 22 About Bank Repossessions in Spain – 21st February 2014

15 of 22 About Spain's Bad Debtor’s List (‘Fichero de Morosos’) – 8th April 2014

16 of 22 About Spanish Creditors Pursuing Debts Abroad – 8th May 2014

17 of 22 Crucially Dación en Pago explained, or, How to Hand Back the Keys – 8th December 2014

18 of 22 Report about of how the European Court of Justice Slams Floor Clauses (‘Cláusulas Suelo’) – 27th December 2016

19 of 22 Warning, that buyers in Spain from the British Isles struggle to recover refunds due to them

20 of 22 Warning, that English speaking clients of Spanish Banks have been systematically cheated for years

21 of 22 Warning, that CJEU conclusively overturns the floor clauses

22 of 22 Warning, that EURIBOR - the promises at the heart of the Spanish Bank deception

Leave your comments

Post comment as a guest

0
terms and conditions.

Comments