Safe Home Income Plans (SHIP), the industry body for the equity release sector, has hit out at the Tonight with Trevor McDonald progamme for wrongly confusing sale and rentback schemes with equity release.
The documentary investigated people who had lost their homes due to shared appreciation mortgages (SAMs) and sale and rentback schemes but SHIP says they were wrongly classified as equity release products.
SHIP says it has never endorsed either scheme and claims it issued warnings about SAMs to the media when the schemes were first marketed in the late 1990s.
The trade body also says it is important people realise that sale and rentback is very different from regulated equity release.
Jon King, chief executive of SHIP, explains: “In sale & rentback, there is no security of tenure for the seller, who takes on a shorthold assured tenancy agreement. In addition, virtually none of the industry is regulated.
“By contrast, the equity release industry….is fully regulated by the FSA, providing complete consumer protection regarding sales and advice and access to a compensation scheme.”
King says much of the equity release sector today is part of SHIP, meaning a businesses must adhere to a consumer protection code.
The code guarantees customers will have tenure for life, no negative equity guarantees and the freedom to move home at any time.
SHIP members also insist all customers take independent financial advice before signing up to any equity release products.
He was keen to state the products featured in the investigation play no part in today’s equity release industry and customers should be wary of any unregulated schemes.
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First mentioned in Cridland Report
Second acquisition of 2019