How To Identify Reputable Equity Release Firms

Equity release plans can be a financial lifeline for retirees. But unfortunately, there are a lot of scammers in the market too.

Over 55s who want to enjoy a comfortable retirement are frequently turning to equity release plans to help fund their later years. By releasing the cash built up in their homes, retirees are able to take this money as either a lump sum or by arranging to receive small monthly payments as an additional source of income. You might begin by using an equity release calculator to help you understand how much you could benefit financially. Your payments can occur alongside a pension or even part-time work in retirement. There’s no doubt that equity release can be a real lifeline for people as they age, but it can also be a target for scammers.

Equity Release Council

If you’re new to the world of equity release and are considering taking out a plan, you must always make sure that the company you’re using is approved by the Equity Release Council. Reputable trade members will only offer Equity Release Council-approved plans which minimises any risk to customers. In particular, a no negative equity guarantee is promised, which means that your estate will never owe more than the value of your home. Any firm who pretends to be an ERC member is disreputable and potentially a scammer, so if you’re not sure about whether your equity release company belongs to ERC, you can use their Find a Member search.

Comparison Sites

There are some excellent comparison sites in the market who are registered with the Financial Conduct Authority. These platforms can save their customers significant money when searching for financial products; however, unfortunately there are scammers in the market too. In December 2019, it was reported that dishonest comparison sites were asking potential customers to enter their personal information into a web form. They did so in the belief they would be provided with quotes for an equity release product, otherwise known as a lifetime mortgage. Unfortunately, their personal information was sold on, at a profit, to marketing agencies who would them bombard the retiree with communications in an attempt to extract further data from them.

Social Media Ads

Equity release marketing ads also frequently pop up on social media platforms. Similar to the comparison site scam, a social media ad will persuade a retired person to part with their personal details in the expectation that they will receive further information about equity release. This type of scam works by collecting data on customers, which is then sold to telesales agents, who will overwhelm the applicant with sales calls until they have committed to an unfair equity release deal.

Using An Approved Broker

Are you interested in equity release but are worried about the possibility of falling victim to a scam? As an extra level of protection, remember that if you receive any type of communication, whether that be an email, letter or phone call, and the offer or product sounds too good to be true, then it probably is! The number one way you can stay protected is by working with an independent equity release specialist who is ERC approved. Contact a reputable firm today.