Following an invitation from the FCA for comment on its recent Mortgages Market Study Interim Report, Equity Release Supermarket has written a letter supporting the regulator’s conclusion that the equity release market needs to do more to support its consumers.
In its letter to the FCA, the lender expressed its “disappointment” in the industry, as it is yet to adopt a more customer-centric view, with this complacency continuing to fuel the lack of understanding and misconceptions consumers have of equity release.
“While we applaud the product innovation that lenders have brought to the equity release market in recent years, consumers are unable to see the benefit of this when they are actively researching online,” Equity Release Supermarket found Mark Gregory said.
The FCA said in its report that firms need to provide consumers with access to product information and website tools so that they are better able to understand their options and make informed decisions in respect of lifetime mortgages and home reversion plans.
Equity Release Supermarket has challenged its competitors to “move beyond” offering consumers simplistic calculators, as online research becomes an integral part of the educations and decision-making progress available to consumers prior to their approach for expert financial advice.
However, as the utilisation of online tools is rapidly growing in the market, more and more ‘lead generators’ are coming into the market making false advertising claims about the services they are able to offer, such as a “free interest rate calculator” or the ability to “compare equity release interest rates”.
The lender observed that, once the advertisement had been clicked, consumers were offered very basic calculators without any access to equity release product or rate information. According to Equity Release Supermarket, consumers are being mis-led into providing their personal data to use these calculators, which could then be sold onto the highest bidder without their engagement.
The letter concluded with the firm urging the regulator to consider taking “immediate action” and investigate lead generators, which Equity Release Supermarket considers is tarnishing the reputation of the industry.
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