Friday, May 30, 2008

Equity Release

From the Costa del Sol Action Group:
'...of especial concern are the Equity Release schemes which have been peddled on the Coast in recent years and have mostly been a disaster for those who have participated. The Action Group has discovered that a number of them have involved criminality. Bearing in mind the average age of the participants of the ER schemes is well over 70 many of the schemes have amounted to abuse of the elderly and robbing the aged of their life savings. The CDSAG is trying its hardest to assist such people. There was one case of a person starving to death and not knowing which way to turn. There has even been the fear of suicide where an elderly victim was too ashamed to tell their partner. The CDSAG stresses that victims should feel no shame at having been caught out by these slick conmen. The perpetrators of these schemes are in many instances highly skilled and seemingly very professional and trustworthy businessmen. Such con artists can take the best of us for our money. Imagine the creative genius and convincing manner it took to sell the Eifel Tower, never mind release the cash tied up in your property!
The CDSAG has found that up-front charges of up to 20% have been imposed in some cases (the norm being around 8/9%) with annual 'management' fees on top of this - with the released cash being invested in disasterous funds in emerging markets (these dodgy bonds paid higher commissions to the financial advisors.) All this has meant that the remaining 80% - 90% of the released capital could never make enough to support the borrowings of the 100%, and provide the promised income. They were in the main commission-driven schemes offered by unqualified, unregistered, heartless, smooth talking, cowboy salesmen'.

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