Expats losing millions to financial fraudsters
28 April 2006, MALAGA — Scores of expats have been tricked out of hundreds of thousands of euros by unregistered independent financial advisers, it was reported.
28 April 2006
MALAGA — Scores of expats have been tricked out of hundreds of thousands of euros by unregistered independent financial advisers, it was reported.
The English language Sur newspaper reported advisors targeted expats from the Costa del Sol to the Costa Blanca and northwards to Barcelona.
They offer prospective clients a return of up to 16 percent on their capital in exchange for taking charge of their funds, the paper said.
The clients, mainly elderly people with no knowledge of the financial market, hand over their savings but the fraudulent 'advisors' quickly empty their accounts and disappear.
On the Costa del Sol, 700 families are said to have lost a total of EUR 110 million to the fraudsters.
These illegal consultants are not on the register of the Spanish body for regulating financial advice, the National Investment Market Commission (CNMV).
Expats have formed the Costa del Sol Action Group to challenge the fraudsters, bringing civil criminal cases in the Spanish courts.
Lawyers acting on behalf of the victims are pressing criminal charges against these financial intermediaries for fraud.
It is estimated that the average amount stolen from each client is between EUR 180,000-200,000.
Since last year, the CNMV has issued 15 warnings about consultants acting without authorisation who may be offering investment services.
Four of them were in Marbella, the rest operated in Barcelona and on the Costa Blanca.
Most of these businesses are based offshore and ask investors to make transfers to accounts in these areas or in Switzerland. Once the capital has been handed over it is out of the control of the authorities.
The British Embassy has published a guide, along with the CNMV and the equivalent body in the U.K., the Financial Services Association, to alert potential investors to the risk.
Subject: Spanish news