Abusive practices: the General Council of the Insurance Intermediaries' Associations issued
a statement denouncing "abusive practices by the banks, tying the grant of loans for SMEs to taking out insurance". Specifically, it stated that banks "are taking advantage of the granting of ICO-backed credit lines for self-employed workers and SMEs affected by the state of alarm, in order to tie the loans to taking out other financial products such as insurance, which amounts to what it describes as blatant illegality". It recalled that intermediaries have reported these malpractices on several occasions, "common in banking, where they tie loans to other products".
The Council goes on to state that the Government has approved an ICO-backed line of credit so that, "as the banks are taking on less risk, they can grant that liquidity without fear of suffering major losses on their books". It notes that enquiries on this issue are increasing, with complaints that "some financial institutions are committing serious abuses by 'forcing' the purchase of insurance tied to the granting of ICO-backed credit lines".
The body states that "it is regrettable that, at a time of health alert due to coronavirus, with businesses and families facing real financial hardship, banks should keep up an illegal practice and use this situation to make money". The statement tells customers that the law protects them and that "they should not have to accept a set of financial products as a condition for obtaining credit".
The General Council stresses how important it is to file complaints, but points out that evidence is needed to do so.
Complaints inbox
On this subject, the CNMC (Spain's National Markets and Competition Commission) has opened an inbox to centralise all complaints and enquiries relating exclusively to the application of competition rules in the context of Covid-19.
It explains that this is a "specific channel for any complaint about anti-competitive conduct in the current pandemic context". The examples it cites include abuse of dominant positions through excessive pricing, anti-competitive agreements between operators, or mass deception involving goods and services. Its notice adds that its priority is the protection of consumers.
The consumer organisation Facua has also chosen to join this complaint. The organisation warns that "lenders cannot force customers who apply to banks for ICO-backed financial support" for paying their rent "to take out insurance".
It bases its position on Royal Decree-Law 11/2020, of 31 March, which states in Article 9 that aid intended for paying the rent of housing for people in vulnerable situations may not incur "any charges or interest for the applicant", it notes. It adds that requiring any type of insurance to be taken out in order to access that aid "would clearly breach what is set out in the regulations and would also call into question the purposes the measure is intended to serve"
The banks' business has already started. Of course, they won't be the first to sell life insurance. You're a bunch of thieves #seguros #AutonomosNoSePaga #COVID19@caixabank @VidaCaixa pic.twitter.com/gAOd2zXBb0
— Damián de Luis (@damiandeluis) April 1, 2020
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