Beware of the Equity Release scams

According to a recent story, there’s been a massive increase in the number of over-55s being targeted for cash which is locked up in their homes.

Equity release in itself is a perfectly legitimate scheme and when done properly with the correct advice, and through a reputable company, can help those aged over 55 access the wealth tied up in their homes as a tax-free lump sum or a regular income. This acts as a form of loan, secured against the asset, so that it does not then need to be repaid until the surviving borrower dies or moves into long term care.

However, the scammers are cashing in. Due to an influx of interest from the market, low borrowing and rates of interest, rogue firms posing on comparison sites have managed to successfully dupe record numbers of people. The market is thought to be equivalent to more than £1bn worth of asset value, according to figures released by genuine equity release companies in the first three months of 2019.

The fraudsters work by convincing homeowners to hand over personal details, such as their phone number, email address and the value of their home, under the guise of helping them to find the best deal. They are then bombarded by marketing calls until they give in – but the victim is simply speaking to salesmen who has paid for those details, which are simply sold to the highest bidder – not getting the best deal at all.

Our advice is to always make sure the company you are dealing with is reputable, and try to avoid those who seek you out. If you are interested in an equity release scheme, do your own research and choose a few companies to give you some options. Also, check they are regulated by the Financial Conduct Authority (FCA) and speak to your family, as well as a solicitor, before taking any action – don’t make any rash decisions.

If you would like further advice, speak to the Private Client team at Downs Solicitors to see how we can help.