First they came for the pensioners, then they came for the PPI victims, and now, it seems, they are after the equity release market, following claims that rogue marketing firms are preying on the over-55s – who are trying to unlock cash from their homes – in an attempt to steal their personal data.
According to claims by Money Mail, rogue firms posing as comparison sites are convincing homeowners to hand over their 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.
But, in reality, many are selling on the customer’s data to the highest bidder, with some individual data-sets being sold for as much as £100 each. Homeowners are then bombarded with marketing to take out an equity release deal through the adviser who paid for their details.
More than 20,000 equity release customers took a record £936m from their properties in the first three months of this year, according to Mintel, and are on track to release £5bn by the end of 2019.
Mark Gregory, founder and chief executive of independent adviser Equity Release Supermarket, told Money Mail: “As more people become comfortable with digital technology, they will naturally use search engines to help them find answers to their questions.
“But, as equity release is fast becoming a mainstream financial product, unscrupulous businesses are trying to cash in.
“Some firms claim to offer equity release advice and access to the best deals in the market. But the sad reality is that some of these businesses are simply lead generators.
“Once they have your email and phone number, they will try to sell your personal information on to the highest bidder. We take a stand against this activity and refuse to buy the information.”
The Financial Conduct Authority has already raised concerns over the increasing number of consumers aged between 56 and 60 taking out equity release products.
The compound interest charged on equity release mortgages means debts get bigger each year, to roughly double every 14 years based on current interest rates. It means a consumer who has borrowed £50,000 could end up paying £100,000.
FCA executive director of strategy and competition Christopher Woolard recently stated: “The risks increase when a consumer takes out such a mortgage at a younger age. The result may be very little money left to pay for care or to pass on to children – or even the loss of equity completely.”
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