The branch of banking law deals with the relationship between clients and financial bodies and is our law firm’s main focus and specialisation. Amongst the banking law matters we deal with in our office, we can highlight the following:
- Advice, preparation and negotiation of financing and refinancing operations.
- Nullity of abusive clauses like floor clauses, mortgage formalisation expenses, IRPH or CECA, expenses, multi-currency or delayed interests.
- Nullity of complex toxic product contracts that are high risk like swaps or exchanges, structured deposits, preferred shares, convertible bonds, United Links, investment insurance or annuities.
- Claims for undue collection of commission for return of bills of exchange, exceeded credit cards or overdrafts and claiming of debts.
- Opposition to mortgage foreclosures and loan, credit, sureties or discount policies.
- Resolution of contracts with claims for compensation for damages
- Negotiation and processing of share purchases for financial entities.
The ‘Peace of Mind’ (Tranquilidad) Mortgage from Banesto is normally sold to couples or newlyweds under the pretext that it is a more accessible loan with regards to the payment of the monthly fees. Over time, however, that does not prove to be the case. The bank, knowing about the low interest rates, ensured that there was a fixed high interest rate for the first ten years, about 5%, far higher than the standard market rate, and an anomalous increasing repayment system that has proved to be disastrous for those affected. The clients that contracted this kind of mortgage loan have found, after the first ten years, that they had a total debt to be repaid and a monthly rate that were far higher than those that they would have if they had a loan with a variable interest rate and a traditional French repayment system.
Financial swaps or exchanges are, generally, sold wrongly, offered as insurance against possible interest rate raises or inflation, with no explanation of information of the true high risks involved in the product, which is speculative.
The lawyers at our firm have achieved dozens of favourable rulings for our clients, consumers and companies, against the indiscriminate sale of this kind of toxic products by banks, achieving the return of their money and any charges for contracting the product.
Both preferential shares and contracts of subordinate debt, despite being complex, high end products, have been sold indiscriminately and en mass by financial organisations to cautious, risk-averse clients, as if they were fixed-term deposits. They are in fact hybrids between fixed equity and variable equity, with no guarantee on the capital invested and a right to recuperate the investment dependent on the rest of the company creditors, listing on a little known secondary market such as the AIAF, which involves a high risk of liquidation.
Both products have been sold by banks and even some companies like Eroski, Endesa or SOS, to access funding from their own clients who they, unknowingly, trapped into investment.
Convertible bonds are also hybrid products between fixed equity and variable equity as, in principle and for a fixed period of time they act as fixed equity, with the investor, in exchange for building up debt, earning coupons or periodic interest. When they expire, or sometimes voluntarily, they are obligatorily changed into new shares, which means they become variable equity. The problem arises when this kind of complex, high risk product is sold to clients with a conservative, small-scale profile.
The best-known bonds that had to be converted into shares, thanks to the losses incurred and their indiscriminate sale to small-scale investors as if they were guaranteed deposits, were those sold by Santander Bank, known as Valores Santander, and by Banco Popular. Both of these organisations have been sanctioned by the CNMV after their mass sale to clients without the appropriate investment profile.
The options for investments in structured deposits or products are broad and diverse. You can find anything from structured instruments which guarantee the full recovery of 100% of the capital invested to others in which there is a risk of losing 100% of this capital.
Without doubt, a structured deposit is an investment type whose profitability is contingent on changes in the price of one or several underlying assets, sometimes variable or fixed equity, sometimes one reference index of interest rates and sometimes mixed. The profitability or loss of the investment will depend on the appreciation or depreciation of this underlying asset. Some organisations have sold them as a-typical financial contracts. If you have any of these products, turn to our solicitors for convenient advice.
The Directorate General for Insurance defines these products as annuity insurance products that guarantee the payment of an amount to the insured party every year of their life. They can be adapted to particular conditions and combined with additional benefits in case of death or for the return of contributions. The norm is to sell these products as if they were an insurance policy, not a complex, risky financial product for which the holder makes a financial contribution, in the form of a single premium, guaranteeing an annuity until their death, at which time there may be an heir that will benefit from the invested capital.
The problem arises when the owner of the product or policyholder decides, for any reason, not to wait until death and asks to surrender of the operation, which is when heavy losses can be incurred because their money is invested in risky products. If you have contracted any of these products, do not hesitate to contact us.
We help you to be able to make claims from financial entities and other companies for the illegitimate interference in the right to privacy of those who have been wrongly entered onto a default register or have stayed on one after the debt has been cancelled, with a claim to indemnification for the harm caused, both morally and economically. We also manage the removal of these default registrations once the debt has been cleared.
According to current legislation regarding this issue, personal information can only be included on these registers if they are necessary for judging the financial solvency of the affected party, as long as they meet the following requirements:
1.- Previous existence of a specific debt, expired, enforceable, which is non-litigious.
2.- Six years have not passed since the date on which the debt should have been paid or the expiration of the bond or the concrete time period if applicable.
3.- Previous payment request from whoever the fulfilment of the obligation corresponds to.