ICO credit abuses spill over into banking again

The shadow of suspicion looms again over the banks for the alleged abuses they commit in granting loans. A situation that gains relevance due to the relationship that many of these loans have had with causes derived from the Covid-19. The ICO guarantees for liquidity have proven to be a success, but doubts about the practices of the financial sector remain very present. And not only for this type of credit, but also for those destined for housing or consumption.

The problem arises when entities require the client to contract with them a certain insurance, under certain conditions, to give them a loan. The sources consulted recall that only the contracting of damage insurance can be imposed

in mortgage loans, but with the company you want.

The great controversy emerged in the first two months of the pandemic. The Government launched, through the ICO, 100,000 million euros in guarantees for liquidity. The bank was busy channeling all the money that companies and freelancers needed … but almost from the beginning it was detected that they were conditioning the granting of loans to take out insurance with them. The National Commission of Markets and Competition (CNMC) -also the Bank of Spain- took action on the matter and warned the sector against these practices; what’s more, he opened a specific complaints box.

All of this has resulted in a Competition file against Banco Santander, Caixabank (and the defunct Bankia) and Banco Sabadell for “possible restrictive practices of competition in the marketing of ICO guarantee lines.” “The CNMC is investigating the link to different products that banks would have required as a condition for clients to be able to access the ICO Covid guarantee lines. It also analyzes the use of credits as a mechanism to restructure pre-existing financial debts, ”the institution announced in June 2021.

However, the sources consulted by ABC explain that these practices have continued to occur in the sector in 2021, already with the warnings made by regulators on their heads. Sources from the CNMC point out that “the proceedings of investigation in a sanctioning file initiated are confidential and we cannot reveal, confirm or deny anything due to the duty of secrecy that we have in the LDC. We can simply indicate that The potential complaints or reports that may be received in this regard would be analyzed and, in the event of dealing with the same facts analyzed in the file initiated, they would be incorporated into it.».

“The person signs what is necessary”

«With the pressure mechanisms exerted by the banking system, in a hard psychological moment with the pandemic and with all the suffering, to someone who has the company stopped and who needs a ICO credit… At that time the person signs what is necessary, ”says Javier Barberá, president of the General Council of the Associations of Insurance Mediators. In his case, he denounces the alleged abuses committed by the sector with the pressure it exerts on the client, the lack of information they provide and the lack of alternatives they provide. And it speaks both for ICO loans and for others, such as mortgages or consumer loans.

From the Spanish Association of Insurance and Reinsurance Brokers (Adecose) also emphasize that these practices of financial institutions are a reality in the market. “We have been able to collect numerous incidents and complaints from associated brokerages in this regard, complaints that had already been detected and publicly warned at the beginning of the granting of said ICO loans,” they explain from the organization. Likewise, they comment that they have not only become aware of this happening with loans due to the pandemic, but with other types of financing to companies and individuals.

Insurance brokers and mediators go on the attack against alleged bank abuses, defending themselves against allegations of malpractice. “As far as we know, there are no official data on potential claims in the case of secured loans. The banks pledged not to link ICO loans to any other banking product, such as insurance. We doubt in any way about the veracity of the high cases mentioned and on its intentionality, which may respond to the interest of third parties. Finally, on the CNMC file, as the body itself said, its opening does not prejudge the final result, “sources from the AEB employer indicate.

Public collaboration

Adecose, for its part, also adds that this “is a frequent procedure that has been increased in recent years”, in relation to the fact that the contracting of insurance with the bank has been increasingly demanded so that a credit.

Therefore, given the ‘boom’ that has occurred with complaints about ICO credits, both insurance brokers and intermediaries have been working with the insurance company for some months now. CNMC to provide information on the alleged breaches committed by the different entities. They collect complaints, complaints and information on banking practices so that the institution can carry out its work more easily and have all the data they can collect.

Likewise, the mediators have already met with the Government and the Ombudsman, and are pending to do so with the Bank of Spain to also alert them to all these problems.


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