Holiday Rentals News - Britons could lose Spanish villas after Landbanski 'fraud'

Britons could lose Spanish villas after Landbanski 'fraud'

Hundreds of Britons could lose their villas in Spain. Up to 600 expatriates have fallen victim to what is claimed to be a fraudulent scheme involving Landbanski, the failed Icelandic bank.

Those involved were persuaded to raise money against the value of their properties to invest in a fund run by a subsidiary of Landbanski, reports The Daily Mail. The scheme was advertised in local newspapers and many Britons raised hundreds of thousands of pounds this way.

Up to a quarter of the money raised was claimed in cash while a further 75 per cent went into the investment fund. The investors claim that they were told by financial advisors that that the returns from the money in the fund would cover the interest that they were being charged. However, many now face having to sell their villas in Spain to cover increasing debts, or have their homes repossessed.

Lawyers acting for the investors have begun legal action against several financial advisors and Landbanski. They argue that their clients were the victims of misleading publicity and fraud. The claims are now being investigated by a court in San Roque, Cadiz.

Among the expatriates affected are Gillian and Roy Birch, who moved to Alicante over 20 years ago. The couple had come into financial difficulties in recent years and saw the scheme advertised in local newspapers, thinking it would help their situation.

Although they were originally cautious they consulted local financial advisors who told them that the scheme could save the couple a significant amount in Spanish inheritance tax. However, they have since found out that it did not affect their tax position. "This calamity has totally devastated us," Mrs Birch told the paper. "[We] were convinced we would have a tranquil retirement."

Another investor, Mike McInness, said that he hoped the debts would be written off or reduced if Landbanski is found to have breached Spanish law. "We were told our money was safe but there are hundreds who could lose their homes," he said. "It is a complete mess."

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