Types
Various common types of misselling may occur. More recently, banks have been at the center of misselling with products such as ISAs and investments. Another type of misselling is the one that took place in Cyprus during the period 2003-2010 where over 900 victims were missold foreign currency loans (mainly CHF) to finance the purchase of Cypriot lease holds.Material misrepresentation
This may include misrepresentation of the commercial situation.Suitability
The sale of unsuitable products, such as invalid insurance, is misselling, and has led to substantial compensation orders.Financial misselling
Financial misselling refers to deliberate false statement made by individual, usually a financial organization representative to sell off their financial products or services usually not profound to the customer. For example, HomeServe, an emergency home repair insurance company based in theCyprus misselling
Between the years 2003 and 2010, Cypriot banks suggested to buyers interested in acquiring property in Cyprus to take out a mortgage in foreign currency loans (mainly CHF) because the interest rates were lower. Thousands of mainly British residents took this advice but this backfired when the franc soared after the financial crisis, and mortgage repayments doubled. Lawyers say that the banks often failed to explain the potential risks of currency fluctuation that could cause repayments to rise, and also applied heavy interest rate rises. Many people have struggled to keep up with their repayments. Moreover, instead of an absolute title to their property, the Republic of Cyprus gave them rights to a property, which if and when built, would be in someone else’s land and be subject to charges by lenders and other creditors until the titles could be separated. The separation of titles could take many years because instead of separating them before sale, the state accepts separation after the development is completed and proves fully compliant with planning. The chances of compliance are slim considering that planners require that they meet building regulations at the time of final inspection and not at the time permission was granted which ends up becoming a catch-up game between planners and developers. In the meantime, purchasers are at risk that the land could be foreclosed by creditors. In this way, the state punishes the purchasers for possible planning breaches by the developers while allowing creditors to have the benefit of security over the land on which off-plan units have been sold. All at the expense of foreign purchasers and in favor of local creditors.Click Law Partners Residual Losses Claim pdf This has resulted in property owners facing unsaleable and unlettable apartments, gigantic loan obligations and negative equity following the collapse of the Cypriot property market.References
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