Back in mid 2010 Banks and “Cajas de Ahorros” in Spain were lacking liquid assets due to the fast growing economic crisis in Europe and USA, and hitting Spain hard. To get quick active assets for their economic ratings they targeted retail customers who had money in their savings accounts with a complex financial investment product that had been initially created for large and mid corporate investment companies since late 90’s.
They told retail customers the product was totally safe
They told retail customers the product was totally safe, it was meant to keep their savings with no risks and with a higher revenue in interests (it was an all-win situation and the bank was doing this because they had been good loyal customers).
In most of the cases the targeted people were elderly with a amount of live savings money from 6,000€ – to 60,000 in average. Gaining their trust through their live long branch director, who for most of them was a trustable figure such as a doctor or a lawyer.
When the EU legislates that money coming from this financial products would not be counted as company’s liquid assets, all this sand castle falls apart. Old people find out they are not getting interests anymore for their deposits and when they try to recover the money they find out that the contracts (some of them 130 pagers long) states that if the bank does not have any benefits they are not forced to pay interests on those deposits plus that money remains in the bank as an asset for eternity. Around 300,000 people affected and 30,000 milion euros are the numbers surrounding the scandal.