Hundreds of Britons living in Spain are fighting to save their homes after becoming involved in an alleged multi-million-pound fraud involving the collapsed Icelandic bank Landsbanki.

Up to 600 expats were persuaded to raise money against the value of their properties to invest in a fund run by a subsidiary of Landsbanki.

Many raised hundreds of thousands of pounds in the scheme, which was advertised in local newspapers, and took up to a quarter of the money in cash – sometimes to cover medical bills – while the other 75 per cent went into the investment fund.

The Britons claim they were assured by financial advisers that the returns from the money in the fund would cover the interest they were being charged. Such schemes have been banned in Britain since 1990.

But the expats say that, even before the bank failed in October, the fund was deteriorating and many of them now risk having to sell their houses to meet spiralling debts or see them repossessed. A few are understood to owe millions of pounds.

Lawyers acting for a group of the investors have now launched a legal action against a number of financial advisers and the bank, accusing them of misleading publicity and fraud.

via 600 Britons in Spain may lose their homes in failed bank ‘fraud’ | Mail Online.