How to avoid Orwellian equity release scams

Vintage big brother watching you spying eyes surveillance and personal data privacy violation concep

Finance expert Peter Sharkey explains how you can avoid Orwellian equity release scams - Credit: Getty Images/iStockphoto

While researching a prospective financial story recently, I happened upon a small number of online operations, the activities of which would not have been out of place in a George Orwell novel.

Many of these niche outfits peppered their websites with sinister-sounding language, using words and phrases such as ‘brand impersonation’, ‘manipulation’ and even ‘brainwashed’, conjuring menacing images of internet browsers having their online searches manipulated or even spied upon. Welcome to the occasionally shadowy world of lead generation.

Renowned for revolutionising so many aspects of modern-day life in a positive sense, both the internet, as well as social media, have a less altruistic side. Online lead generation, the process whereby prospective customers are introduced to a product provider or an intermediary, is a simple, cost-effective means of attracting new customers.

However, as Mark Gregory, Founder and CEO at Equity Release Supermarket notes, over recent years, a “clutch of lead generators have gatecrashed the equity release market: many claim to have access to the best equity release deals or make a succession of other wild claims that simply aren’t true.”

“Why do they do this?” asks Mr Gregory. The answer is perturbing: “To persuade people to part with their data – valuable information they can then sell on.”

Evidence of this practice can be unearthed right across the financial services industry, where rogue online lead generation firms continue to operate, using Orwellian-sounding methods such as ‘search engine manipulation’ to change people’s perception of a product or have a direct influence on search queries.

“We refuse to deal with them,” says Mr Gregory. “Although some of our competitors have no such reservations.”

To counter this, Equity Release Supermarket has created an impressively wide range of online equity release calculators, enabling visitors to get a quick idea of how much they could release from their homes and explore other uses for equity release likely to be of interest for existing and prospective customers alike.

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For example, one particularly useful calculator quickly determines whether moving to a new equity release plan could save customers money in the future. The ‘switch plan’ calculator first compares the cost of a customer’s existing equity release plan with other, potentially less expensive rates currently available. At the same time, it takes account of additional factors, such as the prospective costs associated with changing a plan or any early repayment charges.

Results are displayed in a clear, understandable format on a year-by-year basis, allowing customers to compare between their existing and new plans, establishing the point at which break-even is achieved – i.e. the year when switching plans starts to save money.

Simple to use, perhaps, but this is a valuable tool with the potential to save people many thousands of pounds.

Another useful tool is the ‘equity remaining’ calculator, which quickly determines the value of equity remaining in a property, enabling customers to establish the likely long-term value of their estate.

This is reassuring for those who might be concerned that equity release could seriously erode the value of their estate, so reducing the levels of inheritance remaining for loved ones. Fortunately, a combination of low equity release plan interest rates, coupled with modest, longer-term increases in property prices, ensures that many people are often pleasantly surprised by the potential size of the inheritance they could leave.

Elsewhere, the enhanced/ill-health calculator could prove a Godsend for those aged 55 and over who have existing health conditions. In some instances, homeowners may be permitted to release a higher level of equity from their property or benefit from a lower interest rate on their lifetime mortgage.

For those who want to take an in-depth look at their ‘later life lending’ options, Equity Release Supermarket recently launched smartER, the first consumer-friendly equity release search engine. By answering a few short questions about yourself, your property and your money aspirations, smartER searches the entire market and presents a full list of suitable plans. In addition to being exclusive to Equity Release Supermarket, smartER is also free to use and will not impact your credit score.

It’s essential that anyone considering equity release has access to the information they need to help them in their decision-making process, which means it is imperative to avoid outfits interested solely in collecting personal data and selling it on to a third party.

Mark Gregory’s vision has always been to be as open and transparent as possible, providing those interested in equity release with the information they need to help them in their decision-making process. He’s certainly achieved that goal with the market leading range of tools and calculators Equity Release Supermarket provides.

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