Equity Release missold?

TJI999

Hoping I can get some advice on my parents equity release mortgage. 
They took out a loan in 2010 for £25k. They were advised by Key Retirement who suggested a Just Retirement roll up lifetime mortgage. They had a few debts at the time but these only amounted to about 8k.
The interest rate is 6.59% and they now owe 45.9k.
Basically, my feeling is that this product was completely unsuitable for them for the following reasons:
- They have always planned to downsize in their later years (they are now 77 and 81). That time has come, my Mum is recovering from a stroke and my Dad has depression they want to move to a small bungalow. This debt will make that very difficult now.
- Other than the initial 8k to pay off loans (for double glazing and a small credit card debt), they have never touched the remaining money and clearly did not need it.
- As family members, we did not know about this until years later but could have easily sorted their debt but being of that generation, they didn't discuss with us.
- They need some small adjustments to their bathroom/shower due to my Mums stroke. They would have been eligible for help with this work but because they have the remainder saved they will probably not be now. 
- They clearly did not understand that the interest accrued is compound and now are very upset and feel naive/foolish for entering into this.
Do we have grounds to complain here? I want to get them out of this ASAP and feel very angry that they seem to have been sold a product that they clearly didn't understand and more importantly didn't need.

Thanks in anticipation of any help!

Thrugelmir

Products aren't sold they are applied for.  Nothing you've written suggests that they were missold.  Not least that you are using hindsight to arrive at your viewpoint. Rather than ascertaining what your parents intention was at the time and their reasoning behind what they did.  Have your parents provided you with all the correspondence and product literature? 

TJI999

I'm confused as to what would constitute misselling then. 
My point is they indicated that they wanted to pay off a loan of 6k and credit card debt of around 1-2k.
To borrow 25k for this seems preposterous as my dad gets a decent pension they have a fairly frugal lifestyle.
Also, as their intention was always to downsize and they indicated this at the time - most advice I've read regarding these products now state that if you are intending to move in the future these may not be appropriate.
I can't help thinking that they have been taken advantage of. Particularly as they clearly don't understand what they've entered into. 

TJI999

Another point I'd make is that they were at a local event for senior citizens and a rep from Key spoke to them product. Maybe "selling" is the wrong word but I'm just annoyed that they seem to have had really ropey advice. 

Thrugelmir

TJI999 said:

I can't help thinking that they have been taken advantage of. Particularly as they clearly don't understand what they've entered into. 

Your parents made their decision some 10 years ago.  I'm not defending the company concerned.  It's a common occurrence for concerned people to post on the forum. Not understanding why their parents made the decision they did at the time. Most likely you'll never know. Unless there's evidence that the Company behaved improperly.

Many people plan on downsizing as they get older but never do. You'd would have thought that they would have done by now given their respective ages. Perhaps releasing the cash tied up in the equity gave them peace of mind. Having money tied up in your home isn't of any use in your retirement years. 

Nearlyold

As part of the process of applying for an Equity Release Mortgage, Key Retirement Solutions (assuming that is the "Key" you are referring to) would have insisted that they took advice from an independent Solicitor of your parents choosing to make sure they fully understood the product they were applying for.
Do your parents recall this meeting and do they still have the paperwork from this meeting plus all the paperwork they would have received from Key? 
If you are going to put in a complaint you need to look through all this paperwork to see if it supports your interpretation of events.
You might also want to have a look at some Ombudsman decisions on Equity Release complaints against Key, as far as I can see there is 1 Upheld (slightly similar to your parents case in that the Ombudsman felt that borrowing £55,000 extra over the amount required was excessive), there are however 32 Not Upheld.
I think there is a possible tendency for complaints about Equity Release to be driven more by Beneficiaries Remorse rather than Buyers Remorse
 

csgohan4

I assume your parents were of sound mind 10 years, if anything they should take responsibility for their decision. Where is the money now? I assume they enjoyed and spent it which is within their rights. Whether it was the right thing is a different question. But nothing illegal here, probably mis bought, but not mis sold. 

TJI999

They're not shirking their responsibility in this. Just feeling foolish that they entered into something that was clearly unsuitable. They paid off small loans and then the rest is in savings, earning next to nothing whilst the loan cumulatively collects 6.5% interest. They had a letter from Key the other day saying they could possibly change and save on interest and move to another provider. All for the paltry sum of £1200!
Agree they mis bought. That is self evident. My point is just that the elderly get taken advantage of. Makes my blood boil. 

sourcrates

Most who will respond to your post are all "on the ball", internet savvy types who will say how can they not have understood what this product was and how it worked blah blah blah.

My parents didn`t know one end of a computer from the other, the insurance man that called every week was the font of all knowledge, and what the hell is a Google ?

That generation never thought to question things like we do now, it was not in the nature of most of them to do so, naivety ?  maybe, trust in what you were told is a more likely explanation.

Making a complaint won`t cost you anything, you may or may not have it upheld, personally I would say these equity release loans were not always fully understood by those who took them out.

So you have nothing to lose by complaining, and indeed it is your most explicit right to do so, you may not win, but at the very least you will know you have tried to help your folks out.

Thrugelmir

sourcrates said:

Most who will respond to your post are all "on the ball", internet savvy types who will say how can they not have understood what this product was and how it worked blah blah blah.

My parents didn`t know one end of a computer from the other, the insurance man that called every week was the font of all knowledge, and what the hell is a Google ?

That generation never thought to question things like we do now, it was not in the nature of most of them to do so, naivety ?  maybe, trust in what you were told is a more likely explanation.

Making a complaint won`t cost you anything, you may or may not have it upheld, personally I would say these equity release loans were not always fully understood by those who took them out.

So you have nothing to lose by complaining, and indeed it is your most explicit right to do so, you may not win, but at the very least you will know you have tried to help your folks out.

Biggest concern of those who post with claims of misselling is the loss of their hoped for inheritance. Never had an interest in how their parents managed their finances previously. Not that finance is a commonly discussed matter between generations until needs must. 

sourcrates

Thrugelmir said:

sourcrates said:

Most who will respond to your post are all "on the ball", internet savvy types who will say how can they not have understood what this product was and how it worked blah blah blah.

My parents didn`t know one end of a computer from the other, the insurance man that called every week was the font of all knowledge, and what the hell is a Google ?

That generation never thought to question things like we do now, it was not in the nature of most of them to do so, naivety ?  maybe, trust in what you were told is a more likely explanation.

Making a complaint won`t cost you anything, you may or may not have it upheld, personally I would say these equity release loans were not always fully understood by those who took them out.

So you have nothing to lose by complaining, and indeed it is your most explicit right to do so, you may not win, but at the very least you will know you have tried to help your folks out.

Biggest concern of those who post with claims of misselling is the loss of their hoped for inheritance. Never had an interest in how their parents managed their finances previously. Not that finance is a commonly discussed matter between generations until needs must. 

Yes, i`d agree on that up to a point, but genuine cases are out there.

For example, and its nothing to do with equity release, my mother sold her parents old cottage with 4 acres of land, to a builder who had been pestering her for years to sell it, for a measly 5k.

Granted this is 40 odd years ago, but the land has now soared in value, its on a heritage coast, and currently has 3 houses built on it, total value around £450,000 plus now.

That was my inheritance, do i feel bitter ? hell yes, but he told her it would never be worth much and she believed him, again, that generational thing.