Not upheld: mis-selling of lifetime mortgage and further advance complaint against Aviva Equity Release UK Limited (formerly Norwich Union Equity Release Limited)

Decision detail

Summary

Mr and Mrs G, through their sons acting with power of attorney, complained that Aviva mis-sold them a lifetime mortgage in 2002 and a further advance in 2006, claiming the loans were unsuitable and the accrual of interest was unfair. The ombudsman found that the adviser provided clear information about the risks and benefits of equity release, discussed alternatives which Mr and Mrs G rejected, and that Mr and Mrs G understood how interest would roll up over time. The complaint was made approximately 20 years after the initial mortgage, and the ombudsman found that Mr and Mrs G had the opportunity to raise concerns with Aviva during this period based on annual statements. The ombudsman did not uphold the complaint, finding no lasting unfairness in the relationship between Aviva and Mr and Mrs G.

The Ombudsman's reasoning

The ombudsman found that the adviser provided clear, fair and not misleading information about the risks and benefits of equity release, including how interest would roll up over time. The mortgage illustration clearly showed how interest would be added and increase the balance. Mr and Mrs G were aware of the key terms when they entered into both agreements and had the opportunity to raise concerns with Aviva over the 20-year period before the complaint was made. The ombudsman noted that Mr and Mrs G had rejected alternative options and were insistent on proceeding with the lifetime mortgage. Regarding the 2006 further advance, the ombudsman found that both parties agreed to set aside the five-year gap requirement, and Mr and Mrs G had previously received legal advice explaining the mortgage terms. The ombudsman also considered that part of the complaint fell outside the time limits for making complaints.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website