British expats beat Rothschild private bank over 'dodgy' scheme

Expat pensioners have won a legal battle against Rothschild over its infamous ‘dodgy' equity release scheme, with the judge ruling that the couple was tricked into taking out a mortgage to finance supposedly low risk investments.
Britons Barry and Marion Joyce have been awarded €15,000 by the court and had a mortgage on their villa in Benalmadena, Spain, cancelled. The couple, now in their 70s, are able to keep their home, which was set to be repossessed, after the judge's surprise ruling.
The case goes back to 2006, when the couple took out a €227,000 mortgage with the bank to invest the money. Their investment with Rothschild was called the Spanish Investment Retirement and Income Mobilisation Plan (SITIR) and was targeted at retired expats who owned their homes outright.
Rothschild sold a very complex product with a high risk to elderly and retired people who had zero knowledge of financial business"
The bank offered a mortgage of up to 75% of the value of a property and agreed to put the money in low-risk investments to generate a steady income.
However, the investments failed to perform, leaving them owing tens of thousands of euros to the bank in mortgage repayments. Within 12 months, the couple saw nearly €55,500 wiped off the value of their investment.
In 2016, the bank demanded the couple repay €302,000 and threatened to take their home.
Now, not only has the court wiped out the debt, but agreed the couple can keep a €15,000 euro bonus given to them when they signed up for the deal. Rothschild was also ordered to repay any money handed over by the couple.
Their lawyer is hoping to get a similar result for a further 20 British clients he is representing around Spain. All of them had been badly advised to take out mortgages on their Spanish homes and invest them into supposedly low-risk stocks in the early 2000s.
"Rothschild sold a very complex product with a high risk to elderly and retired people who had zero knowledge of financial business," Pablo Espejo, from Iura International, told The Olive Press.
The lawyer predicts that Rothschild will have to pay up to €9m to British expats across Spain that also invested in the bank's scheme.
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