Mis Sold Equity Release
Have you been sold an equity release product that you feel was misrepresented, unsuitable or inappropriate for your needs? Our guide explains how to identify mis-selling, the process for making a complaint and the help available to you.
Find out your options for seeking redress and learn how to protect yourself from future financial risks.
In recent years, there have been some reported cases of mis-selling in the equity release industry, where some providers may have sold the product to people who were not eligible, or they failed to explain the implications and risks involved in detail.
If you think you have been mis-sold equity release, it’s crucial to take action quickly to avoid further financial losses.
Page last updated – 16th February 2023
The Equity Release Council
The Equity Release Council is a UK industry body that represents providers of equity release products, which enable homeowners to release cash from their properties while continuing to live in them. The Council was established in 1991 and has since taken a number of steps to protect consumers from being mis-sold equity release.
Here are some of the positive things the Council has done:
Introduction of Codes of Conduct:
The Council has introduced a number of Codes of Conduct, which set out rules and principles for equity release providers to follow in their dealings with consumers. These codes have been updated over time to reflect changes in the market and new regulatory requirements. For example, the most recent version of the Council’s Code of Conduct requires providers to ensure that customers fully understand the product and its risks before making a decision to proceed.
Requirement for Independent Legal Advice:
The Council requires all customers to receive independent legal advice before taking out an equity release product. This advice is provided by a solicitor who is not affiliated with the equity release provider, and is designed to ensure that the customer fully understands the legal implications of the product.
Promotion of Consumer Awareness:
The Council has been active in promoting consumer awareness of equity release products and their risks. For example, the Council’s website includes a number of guides and information resources to help consumers make informed decisions about equity release. The Council has also worked with other organizations, such as the MoneyHelper, to promote consumer awareness.
Establishment of a Complaints Procedure:
The Council has established a formal complaints procedure to handle complaints from customers who believe they have been mis-sold an equity release product. The procedure is designed to be transparent and impartial, and is overseen by an independent adjudicator.
Improved Market Standards:
The Council has worked with regulators and other industry bodies to improve market standards for equity release products. For example, the Council has been active in supporting the implementation of the Mortgage Market Review, which introduced new affordability checks for equity release products.
According to the Equity Release Council’s market report, the total amount of equity released in 2022 was £4.9 billion, which represents a 10% increase from 2021.
This growth is a positive sign for the industry, but it is important that customers are protected from being mis-sold equity release products.
The Equity Release Council’s initiatives have helped to improve consumer protection and promote market standards, which are essential for the long-term success of the equity release market.
How To Take Action
Equity release is a complex financial product that is not suitable for everyone. Unfortunately, even with the safeguards put in place by the Equity Release Council, there have been cases where equity release schemes have been mis-sold to consumers, leading to financial hardship and distress. If you believe that you have been mis-sold equity release, there are steps you can take to address the issue and seek compensation.
Identify the problem
The first step is to identify the problem. Common issues that arise with equity release schemes include inadequate advice, unsuitable products, hidden fees and charges, and high-pressure sales tactics. If you believe that any of these issues apply to your equity release scheme, you may have a case for mis-selling.
The next step is to gather evidence to support your case. This may include documentation such as the equity release contract, marketing materials, correspondence with the equity release provider, and any other relevant documents. You should also keep a record of any phone calls or meetings you have had with the equity release provider or their representatives.
Contact the equity release provider
If you believe that you have been mis-sold equity release, the first step is to contact the equity release provider and make a complaint. The provider may have a complaints procedure in place that you can follow, or you can contact them directly to make your case.
Seek independent advice
It may also be helpful to seek independent advice from a financial adviser or a solicitor who specialises in equity release mis-selling. They can help you to understand your rights and advise you on the best course of action.
Contact the Financial Ombudsman Service
If you are not satisfied with the response from the equity release provider, you can contact the Financial Ombudsman Service (FOS). The FOS is an independent body that can help to resolve disputes between financial service providers and consumers.
The equity release industry in the UK appears to be making strides towards improving customer satisfaction, as evidenced by a significant decrease in the number of complaints received by the Financial Ombudsman Service.
In 2021, the Ombudsman received 281 complaints about equity release schemes, but in 2022, that number dropped dramatically to just 115. This trend suggests that providers may be more focused on addressing customer concerns and delivering a positive experience for older homeowners who are looking to release equity from their homes. As the industry continues to evolve and adapt to changing consumer needs, it will be interesting to see how these trends develop and what new innovations may emerge.
If you believe that you have been mis-sold equity release, it is important to take action as soon as possible. The longer you wait, the harder it may be to make a successful claim. By following the steps outlined above, you can protect your rights and seek the resolution you need.