Bank deposit turns into a waking Iberian nightmare
Spanish banks have invested their customers’ money even without their permission. Helena and Esko Antikainen, who live part of the year in Spain, are among the thousands of victims of this illegal practice
By Jyri Hänninen
The value of the bank deposits made with Spanish banks by foreigners living in the country is under threat of being slashed drastically.
This group of unfortunates also includes a number of Finns living in Spain.
Hundreds of thousands of Spaniards are facing the same problem.
The reason for this is that Spanish banks have offered savings accounts to their clients, from which some of the money has been invested in stock.
Now that the Spanish economy has more or less stalled, the value of the shares in many cases has plummeted.
This has cut the capital of the depositors by up to 30-40 per cent.
The stipulations of the euro area bank support worsen the situation, for they call on the depositors to shoulder part of the responsibility.
In Spain this applies to hundreds of thousands of account holders, whose money the banks have invested here and there.
Investments in stock have even been made without seeking permission from the account holders.
People have been under the impression that their capital is sitting there normally in a savings account.
In some cases, the banks’ information to customers about the terms and conditions of the accounts has been unclear or insufficient.
Within the European Union, bank deposits are protected up to EUR 100,000.
The deposit protection, however, does not cover losses if the money has been invested in stock.
The victims of this scam also include some Finns, such as Helena and Esko Antikainen, who live part of the year in Mijas Costa, close to Fuengirola on Spain's Costa del Sol.
They have an account with the La Caixa bank, Spain's third-largest financial institution.
They opened the account to make paying bills and taking care of other banking matters easier while in Spain.
In the spring they encountered a rather harsh surprise.
The Antikainens tried to withdraw money from their account, but did not succeed.
“The bank said that it was impossible, because there was no money”, explains Esko Antikainen.
The couple started to look into the matter.
It turned out that the bank had invested the Antikainens' money - to the tune of tens of thousands of euros - in the stock of two Spanish companies, Repsol and Telefónica.
The Antikainens would have received some money through the sale of the shares, the value of which had plummeted by 40 per cent since the purchase date.
In other words, the Antikainens would have had to book substantial losses for their deposits.
Part of the Antikainens’ deposits had been transferred, without their permission, to La Caixa Bank’s own shares.
The account of the Antikainens was supposed to be capital-protected, and the account holder was supposed to be able to withdraw the money from the account at any time.
The couple had gone over the account terms and conditions with a Finnish woman who worked for La Caixa.
The case seemed crystal-clear: the bank had violated the terms of the account.
In this situation, the bank offered an unusual means of settlement.
The Antikainens would have received "an interest-free EUR 12,000 loan that would not have to be paid back ever". The small print of the loan contract nevertheless revealed that in reality they would have had to pay the loan back in full in three years’ time.
The couple hired a lawyer. The handling of the case is still pending and it will continue in early September after the holiday season in Spain has ended.
According to current estimates, between 20,000 and 30,000 Finns live in Spain either permanently or at least part of the year.
There are no statistics available as to how many Finns have made bank deposits or invested money in Spain.
British newspapers have reported that hundreds or perhaps thousands of Brits have witnessed the disappearance of their bank deposits.
It is more than likely that the Antikainens have many Finnish companions in misfortune.
Their exact number is impossible to verify.
So far the Finnish Financial Ombudsman Bureau (FINE) has not been contacted regarding the matter, and according to the people interviewed by Helsingin Sanomat it has not yet surfaced to any noticeable extent within the Finnish community in Spain.
“I very much fear that once the Finns who like to spend their winters in the Costa del Sol region and their summers in Finland return to Spain later this autumn, their banks will have nasty surprises waiting for them”, Esko Antikainen concludes.
Helsingin Sanomat / First published in print 13.8.2012
Previously in HS International Edition:
Collateral on loans to Spain and Greece costing Finland EUR 22 million (13.8.2012)
BACKGROUND: Finland exchanged profits for security (13.8.2012)
Permission still sought for permanent Finnish upper secondary school on Costa del Sol (25.2.2009)
Ex-pat community on Spain´s Costa del Sol to receive long-awaited Finnish social worker in the autumn (15.3.2011)