The government announced yesterday that it wants feedback on a proposed code of practice for these schemes.
"The release of several new home equity release products into the New Zealand market recently has raised issues about standards and practices associated with reverse mortgages and other similar products," senior citizens minister Ruth Dyson says.
"Having minimum standards in a code of practice will provide protection for older people and give them a degree of confidence in these schemes."
Market leader Sentinel has tried to establish an industry body, SHERPA, to police HER schemes, but not many players have joined up. Bluestone, one of the new entrants has become a member, however Christchurch-based Lifestyle Securities, which is one of the earlier market players, is opposed to the idea.
Its managing director, Darryl Queen, says the problem is that rogue players aren’t likely to sign up to such an organisation therefore there is little point in joining.
“The Office for Senior Citizens will draft standards by gathering submissions from key stakeholders, including seniors groups, financial organisations and the public.
“The information provided in submissions will give the Office for Senior Citizens a better understanding of the range of views, interests and concerns, enabling these to be taken into consideration when proposals for standards are developed.
Dyson wants the recommendations by the middle of next year. The public discussion document and submission booklet will be available from 1 November.
