OFT showing its teeth on sale and rent back

by John Fitzsimons on 31 July 2009  |  0 comments
Tweet

It’s a positive sign that the Office of Fair Trading is tackling the misleading claims made by sale and rent back firms.

I don't have a lot of time for sale and rent back firms.

Positive stories about these firms are few and far between - particularly compared to the horror stories about some of the claims the firms make, which can best be described as misleading.

The FSA has finally taken on regulation of the sector (albeit in a half-hearted, interim form), but the Office of Fair Trading also has a role to play - a role that it is taking a proactive role with, having this week cracked down on 12 sale and rent back providers.

Six firms have been ordered to take down their websites, while three have promised to amend the claims made on their websites. The last three have been kicked out of the market altogether.

The OFT first warned these firms about their conduct back in January, instructing them to justify the claims they had made in their promotions, which included statements that residents would be able to live in their property for life after selling it.

Inevitably these firms could not justify the unsubstantiated claims. They prey on vulnerable people, sign them up to awful deals which see the firm snap up the property at a massive discount, and then ditch the former owner at the first opportunity.

Not all firms are so dishonest - some will try to treat their customers ethically. But they are very much in the minority in this field.  

I would still recommend against even considering going for one of these deals - if you are really struggling with your mortgage, talk to your lender. Until the FSA and OFT have finished the job of cleaning up this very shady industry, I wouldn't want to go near it.