The Court of First Instance of Zaragoza has issued a ruling, a pioneer in the Aragonese community and one of the first in all of Spain, which cancels the 20-year life insurance and payment protection that Banco Sabadell had contracted to an individual when signing the mortgage.
According to the ruling, the financial institution imposed the advance payment of the premiums for a total amount of 23,068.38 euros, as well as the financing thereof, so that it increased the mortgage loan by 19,450.70 euros. Both aspects are annulled in the judgment, which obliges Banco Sabadell to return around 20,000 euros to the client.
The lawyer of Constitución Abogados and legal advisor of the Association of Insurance Mediators of Zaragoza, José Luís Carrera, who has directed the case, has explained that “the life insurance premium consumed is reduced to the market price, according to offers that we present, and the difference will be returned to the customer “. In addition, it has added that the interest paid for the financed part of the premium will also be returned to the client, as well as the payment protection insurance premium and the financed part of it.
“It has been a common practice not only in Banco Sabadell but in numerous financial institutions and it should serve to sanction banks for imposing this type of very long-term insurance. The imposition of such long-term insurance is an abusive practice, according to the judge, with which the bank intends to prevent the client from taking out insurance with companies that do not belong to the financial institution itself, “the lawyer stated.
The ruling indicates that the imposition of 20-year insurance with payment of a single financed premium clearly benefits the bank and its business group, by obtaining interest on the premium, in addition to guaranteeing a duration of 20 years that makes it impossible for the insured to withdraw. that, in addition, he could have obtained much more advantageous conditions by having taken out insurance, especially life insurance, with other companies.
In this sense, the sentence partially annuls the mortgage clause although it does not cancel the bonus. “The interpretation given by the judge is that the bonus should be applied equally with policies from other providers and, in addition, it condemns the bank to pay the costs of the judicial process,” says the lawyer.
“The imposition of insurance of such a long duration is an abusive practice, according to the judge, with which the bank tries to prevent the client from taking out insurance with companies that do not belong to the financial institution itself”, explains José Luís Carrera, who Remember that clients have the right to take out insurance with the company of their choice and the prohibition that real estate credit contracts impose products such as home insurance, life or payment protection in exchange for bonuses on the mortgage.
As a result of this pioneering ruling, the General Council of Associations of Insurance Mediators has approached the General Directorate of Insurance to qualify this practice as “malpractice”, which would lead to a review of mortgages and insurance.