The husband and wife, who have not been named but are both said to be 59, and their 25-year-old daughter, are being investigated for fraud, operating without a licence and engaging in criminal activity.
They allegedly ran a residential care home for the elderly in their own home in Santa Pola, a resort on the Alicante coast that is very popular with expats.
The family "targeted elderly British expats who were resident in the town, had no family nearby and who spoke only English," according to a statement from the Guardia Civil in Alicante.
The daughter worked in a pharmacy in the town where she identified potential victims, investigators said.
"She would show interest in them and establish an emotional tie with them. She would get information of how they lived, about their purchasing power," the spokesman said.
"They were persuaded to move into the so-called care home where they paid a monthly fee of between €2,500 to €3,000 a month. Then the residents were told to hand over documentation and deeds to their properties with the intention of convincing them to sign them over to the suspects to inherit on their death."
Photo: A bedroom at the unlicenced residential home. Photo: Guardia Civil
Investigators said there was no suggestion that the residents had been physically mistreated while at the home.
"If one of them received visitors, they were watched closely to ensure that they didn't discover what was going on," said the statement.
"Their control was so tight that mobile phones were confiscated and the residents were watched all the time with CCTV cameras."
The alarm was raised after one resident managed to escape and inform relatives.
The five-bedroom care home had been running for at least five years, the Guardia Civil said.
"Those hired to care for the elderly at the home did not have the proper qualifications," the statement explained.
"The centre was not operating with a licence and therefore was not regulated by local authorities."