The Consumer Panel has expressed concern about today's announcement by the Financial Services Authority of final rules for the regulation of Home Reversion plans. These are equity release products used by many elderly people to boost their income in their old age, but consumers must beware. John Howard, Chairman of the Financial Services Consumer Panel said:

"We have had numerous discussions with the FSA about home reversions, and still continue to be concerned about the level of protection for consumers:

• Firstly, the new FSA rules will allow these products to be sold without advice, when this reduces the existing protection under trade body^* guidelines which said that advice should always be given;
  
  
• Secondly, there will be one valuation of the property for both the consumer and the firm purchasing part of their property, so consumers may not get the best price for the portion that they are selling.
  
  
• Thirdly, the Treasury has imposed a twenty year limit on home reversion schemes to differentiate home reversions from other loans – and yet this will mean that if a consumer aged around 60 takes out a home reversion, they could face eviction from their home when they are around 80, when the investor would be able to demand the return on their capital investment, with inevitable consumer worry and detriment.

We have repeatedly stated our concerns to the FSA – these are complicated products, purchased by elderly people who are often less able to look after themselves, and which will need to be fully explained to consumers. We do not think that the FSA's new rules go far enough to protect consumers."

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1. The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.
   
   
2. The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. More information about the Panel's work is available on our website – www.fs-cp.org.uk



3. The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.
   
4. There are currently thirteen members of the Panel as listed below (for further information on individual members, see the Panel's website).

John Howard (Chairman)
Adam Phillips (Vice Chairman)
Kay Blair
Stephen Crampton
Caroline Gardner
Harriet Hall
Tony Hetherington
Stephen Locke
Nick Lord
David Metz
Lindsey Rogerson
Paul Salvidge
Carol Stewart