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Have you been mis-sold an Equity Release Mortgage?

Many people have been persuaded to sign up for an equity release mortgage loan resulting in unexpected outcomes, such as high costs and obligations. We help clients with complaints claim compensation after receiving unsuitable advice to sign up for equity release mortgages that weren’t right for them.

Mis-sold equity release can be a serious form of financial mis-selling. If you are worried that you or a loved one were persuaded by a mortgage or financial adviser to take out an unsuitable equity release mortgage, then get in touch with TLW Solicitors for a no-obligation initial discussion to see if you can claim compensation. If we think you have a claim, then we can help on a no-win, no-fee basis.

Signs of Equity Release Mis-selling

There are several indicators that you may have been mis-sold an equity release mortgage.
Questions to consider:

  • Were the extremely high costs explained to you?
  • Were early repayment fees, charges, and any commission arrangements relating to the equity release mortgage explained?
  • Did you have savings that could have met your need?
  • Were other cheaper borrowing options explored?
  • Were you planning to move or downsize sometime in the future?
  • Were you told what would happen if the value of the property changes?
  • Were the tax implications discussed?
  • Is there any significant healthcare or other considerations that make your circumstances unique? For example, if joint homeowners were planning to release equity, did they either have a degenerative disease and in turn be likely to require care in the future?

Should I be worried about Equity Release Mortgages?

In its recent review, financial watchdog, the Financial Conduct Authority (FCA) highlights that it is becoming increasingly concerned by the growth in the equity release market and is looking to tighten its regulation.

Some of the problems the FCA have found include:

  • Advice not tailored to individual circumstances and needs;
  • The very high cost of equity release not being properly explained by advisers;
  • Property ownership being changed to remove an owner under 55 who would not qualify for equity release.

An example of Equity Release Mis-selling which we have seen

Despite already having £110,000 in savings, one of our clients was encouraged by their financial adviser to take out an equity release mortgage of £60,000 in 2003. The money this released was used to buy a property for their daughter.

In 2018, due to their deteriorating health, our clients moved into sheltered accommodation. When they contacted the equity release company, they found that to repay the original £60,000 would now cost £370,000, including an £81,600 early repayment fee.

The cost of the equity release mortgage and early repayment fee were never properly explained and the adviser had failed to consider using our clients’ savings for the purchase.

What compensation can I claim?

The aim of compensation is to put you in the position you should be in had you received the correct advice. This includes recovering lump sums paid, interest, advisers’ fees, early repayment, and other penalties. You can also claim for any distress and inconvenience.

How do I claim compensation?

For anyone concerned about the professional advice they received when signing up for an equity release, the first step is to make a complaint to the mortgage adviser.

If the issue is not resolved, then the complaint can be escalated to the Financial Ombudsman Service (FOS), a Government-backed body that settles complaints and disputes between consumers and financial services businesses. FOS can award compensation in appropriate cases.

If the FOS cannot resolve the dispute, then subject to the strength of the case, it may be possible to take civil court action for compensation, although strict time limits do apply.

If the adviser or their firm has gone out of business, it may still be possible to claim compensation from the Financial Services Compensation Scheme (FSCS), the Government lifeboat scheme set up to help victims of failed financial firms.

Equity Release claims after death

The specialist team at TLW has found that many equity release mis-selling cases are brought by family members of deceased relatives, such as parents when dealing with their estate. As the home is usually the biggest asset, those administering the estate are often surprised that there is no longer any value left in the property under an equity release mortgage. In that case, it is still possible to make a claim if there is evidence of mis-selling.

Later Life Lending

Lifetime mortgages involve the property owner taking out a secured loan with interest being charged. The loan does not have to be repaid until the owner/s die or move into long term care.

Equity release mortgages are a way of property owners unlocking the spare value in the equity of their home. This is done by selling a share of the property in exchange for a cash lump sum or regular income over their remaining lifetime. This is known as a home reversion plan. Only property owners aged 55 and over can take out an equity release mortgage.

In most equity release mortgages the interest continues to go up on a rolling, “compound” basis, increasing the longer it lasts.

TLW Solicitors Can Help

If you’re concerned that you or a loved one signed up to an unsuitable equity release mortgage, fill in our enquiry form below, email us at or call us today for a free no-obligation discussion. Time limits apply, so anyone wishing to bring a claim should get in touch without delay.

TLW Solicitors are specialists at claiming compensation for those who were mis-sold equity release and left out of pocket.

For added TLC, think TLW Solicitors.

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