Labour backbenchers have accused Norwich Union and other equity-release providers of misleading advertising and targeting an inappropriate market.In a Westminster debate this week, Labour MP and Treasury select committee member George Mudie used the example of an NU ad as evidence that products are being targeted at too young an audience. He said marketing does not explain the downsides such as high minimum withdrawals and high repayment values. Labour MP David Taylor also slammed the NU ad, which suggests using equity release to pay for a holiday. He said people would be suffering poverty and homelessness at 85 after spending on a holiday at 55. Treasury Financial Secretary John Healey said he would ensure that a transcript of the debate and all comments on specific companies were passed on to the FSA. Mudie praised the recent Which? report on equity release for “ruffling the feathers” of providers and called for improvements to sales processes, with more focus on details such as the effects on benefits and the potential for vast interest payments. He said penalties for firms need to be stiffened, with bigger fines and bans for the worst offenders. He also called for regula- tion to force down minimum withdrawals but Tory shadow Treasury minister Mark Hoban argued that it should be left to market forces. Mudie said: “NU has been running an advert aimed at those aged 55 and over. If an IFA were doing their job, they would be pointed to another product straight away.” NU Personal Finance sales and marketing director Daren Carter says: “The comments made at the House of Commons and by Which? do not reflect the strong controls and processes Norwich Union has in place to give us assurances over the advice we give to customers.”
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