It is by far one of the worst financial misdemeanours to sour Spain and at unprecedented levels, many of the savers of the Spanish lender Bankia who have lost fortunes, are turning their back on inadequate state-supervised compensation. Instead these embattled savers are opting for expensive law suits to gain compensation they feel is more in-line with their situation.
This in turn is not putting an end to the scandal surrounding Bankia and is delaying the efforts of the Spanish government to restore faith in the banking sector.
The mis-selling of products was widespread and hit savers of all kinds. Many elderly savers for example were sold what they were told were totally safe, and high interest products, only to find they were in no way safe and when the crisis hit, interest was not what it was sold as either.
The crisis has now been dragging on so long and the savers are so disillusioned at the banking system and with the government, they see the rescue package as a trick and think that it will mean they will never see their savings again.
An example of the proposed rescue packages includes a saver that had 80,000 euros in Bankia preference shares told that they could have them converted to ordinary shares at a loss of 38%
Clearly for many who had their life savings in Bankia, it is not good enough and they are prepared to take on the bank and if necessary, the government to get back what is rightly theirs.
Of course the other damning factor for the bank and the government, should individuals proceed with private law-suits, is that the bank will have to fund these compensations and court cases, something not factored into the current bailout of the bank.
The scandal however will not just hit the savers of Bankia, it will affect every person living in Spain due to tax rises, cuts in spending and other austerity measures put in place to help regain losses and get the country back on track. This of course will take years to achieve meaning a hard slog for the people on the street.
Under the state controlled compensation scheme, customers of Bankia have until the end of June if they want to file claims for the mis-selling of products, after which each claimant must sign off on a legal document waiving any right to future legal action.
