A couple and their four children have filed a judicial protest against Bank of Valletta and its subsidiary MSV Life, in which they claim that they had been mis-sold eleven life policies through the use of “deceptive information, misrepresentation and unfair commercial practices.”
Emanuel Peresso and his wife Carmen had purchased 11 life policies from Middle Sea Valletta between 1995 and 1997, with maturity dates ranging from December 2012 to September 2029. A number of these policies also covered their four children, Victoria, Noella, Maria Christina and Michael Peresso.
In a judicial protest signed by lawyer Ian Refalo, the Peressos said that they agreed to purchase the life policies on the strength of the quotations they received from BOV, which is the controlling shareholder and sales intermediary for MSV.
These pre-sale quotations had an estimated maturity value including reversionary bonus amounting to €1,722,600, going up to €2,299,905 if the terminal bonus is included.
But on 17 July, 2007, the Peressos said, MSV unilaterally revised the estimated maturity value of each of their eleven life policies.
The estimated maturity value including reversionary bonus was reduced to a range of between €903,219 and €1,280,606, representing a 26-48% reduction, while the estimated maturity value including reversionary bonus and terminal bonus was reduced to a range of between €1,058,673 and €1,507,743, representing a 34-54% reduction.
Two of these eleven policies had matured by the time MSV made another unilateral revision of the estimated maturity value on 15 January 2014, affecting each of the other nine policies. In total, the Peressos said, the effect of the two revisions amounted to a reduction in value of between 55 and 60%.
So far, three of the eleven policies have matured, and their maturity value amounted to a total of €129,578, €88,329 less than the original estimates. The Peressos did not accept these maturity proceeds and have not cashed the cheques issued by MSV.
The Peressos estimate that the total maturing policy value of all eleven policies combined will be around €834,000, 64% less than the estimates quoted to sell the policies to them.
They said that it was manifest that MSV “is manoeuvring to renege on its obligations inrespect of the maturity values of the eleven policies sold by BOV and MSV on the basis of estimated values intended to entice claimants to purchase the said policies.”
“The sale of the said life policies by BOV and MSV was procured by artifices of deception and misrepresentation and in bad faith, and which practices constitute gross mis-selling and the breach of applicable legislation,” they added.
In correspondence which took place on April, MSV admitted that quotations were based on a return of 6.75% per annum, but the Peressos pointed out that all policies were revised downward to a return of just 2.25% per annum.
“From the year 2000 onwards, MSV never paid the prospected rate of 6.75% and this notwithstanding the positive trend in global equity markets, most of which are at record levels, and also as resulting from the returns realised by the same BOV and MSV on their own investments and this according to the annual financial statements published for these years,” the Peressos pointed out.
The Peressos argued that BOV and MSV sold the policies “as a result of the provision of deceptive information, misrepresentation and unfair commercial practices,” in breach of the Consumer Affairs Act.
After noting that BOV and MSV failed to respond to attempts to remedy this situation, the Peressos insisted that they should immediately remedy their unlawful acts and pay them the damages they have suffered.
They said that they reserved the right to take any further action they were entitled to in order to protect their interest.