Spanish bank practices are a waking nightmare

[Myrtle Hogan-Lance]

This is a frightening article about Spanish banking practices. 

Assuming this has been reported correctly, this sounds like theft, something which is normally illegal.  And it does not involve having sold people an investment; the money was taken from their savings account.

Is this normal?  Legal?  This would be completely unethical and illegal in any other country I know of.  How can they get away with it? 

[Perikles]

This can't be legal, but I can't help thinking there is more to this than is reported. 

[poker]

Isent a normal savingsaccount to me ?
The banks have these differant safe/gamble options in every country.
If you dont read the smallprint,  cant understand it,  dont gamble whatever the banks say.

I'm sure the Norwegian bankclerk knew very well the risks but then only got a percentage (personally) on the money brought into the bank.
Don't think the bankclerk invested their percentace cut in it.

[NAH]

It does make a pleasant change for it not to be an English couple, as appears to be the case so often, complaining about how they were 'turned over' in Spain.


As Poker says, I suspect small print that either wasn't read or wasn't understood.

[Myrtle Hogan-Lance]

Yes, I agree with you guys in that the first thing to question is the small print.  Perhaps our resident banking expert will shed some light later on in the day. 

[Nova]

This can't be legal, but I can't help thinking there is more to this than is reported. 

Almost certainly.  I myself have had the experience of painstakingly explaining the detail of a product to a customer, only for them to change their minds later, sometimes several months down the line and then claim that it wasn't what they understood it to be, as a means of trying to get out of it.  There are also those customers who won't allow the advisor to explain and say "Just do it, I trust you".  It can be tempting not to take them up on that offer when you're pushed for targets.

I didn't see in that article how long ago the products were contracted.  Five years ago, structured or linked deposits, where the return is directly related to the evolution of stock, were commonplace, and with the general mentality to assume that stocks would continue to rise, clients happily contracted such products without the flicker of a doubt or apprehension, with the "expected" headline rates of 10% and above appearing far more likely and appealing than the small print "worst case scenario".

Of course it is extra difficult for foreigners contracting financial products here as they often don't understand what they are signing and place their trust entirely in the explanation of their own-language advisor.  That's the job I was brought to Tenerife for.  It only takes an unintentional oversight of detail, or a verbal misunderstanding for a client to contract something that isn't quite what they think it is.  I was always very careful to explain the small print and cautions to customers for that very reason, but my sales performance suffered because I was having to make a bigger deal of drawbacks to my customers than my Spanish counterparts, who were more able to promote the advantages and let the literature and contracts speak for themselves.

There was an advisor in our bank, years ago, whose name lives on in the legends recounted by customers and employees alike.  The factual detail is hard to distinguish from the mythical versions that vary from teller to teller, but the basics are that a young man who worked as an English-speaking advisor was in the habit of moving money and contracting products without his clients' permission.  Some are grateful to him for the profits they made on shares and investments they never knew they had, whilst others claim they lost money.  What is known is that he left the bank and the island very shortly after he was found out and a dedicated management team had to spend months untangling the web to track exactly what he had done.

So no, products cannot be contracted, and no investments can be made without the customer's consent and signature, and violations are taken seriously.  However, where there is a language difficulty where the customer's understanding is dependent on a verbal translation, there is no way to prove exactly what was or wasn't explained and agreed upon.  This may cause problems for some customers who genuinely misunderstood, or may conceivably have been misguided on the product, but it's also a convenient argument for those who simply change their minds when they realise they're losing money.

[Myrtle Hogan-Lance]

Good - restores my faith in the industry, such as it was (my faith).  Glad you mentioned the language issue, which none of us took up earlier, but which clearly must have played an part in this, and many other situations.  I have always placed faith in the contract, so it is good to know that is absolutely in place. 

Still, I feel for the Finnish couple, who were too trusting, and are paying for it.