Homeowners alerted to dubious 'Crossroads' plan

Homeowners alerted to dubious 'Crossroads' plan


Homeowners have been alerted to the potential repossession risks associated with handing over their property rights to unregulated insurance firms.

 A report published by the FSA highlights the operations of one particular company called Asset Income Plan Ltd and their product, ‘Crossroads’.

Asset Income Plan Ltd supposedly pays homeowners an annual income of five per cent based on 50 per cent of the value of their property. But, this is on the condition that the company take a legal charge of the property.

The FSA is concerned that consumers may be persuaded to permit insurance companies to take a legal charge of their homes whilst not fully understanding the implications.

In the case of Crossroads, the legal charge taken against the property is set usually for three to ten years. During this time the homeowner may be at risk of having their property repossessed by the firm. 

Despite the company claiming this to be an unlikely scenario and only possible if the firm itself were to become insolvent, and if the capital risk insurance did not cover this, the FSA has yet to confirm whether this is true.

A spokesperson for the FSA said: “The product information explains that Crossroads is not regulated under our rules. This might mean that its advisers and providers do not need to be authorised by us, although there is not enough information currently to confirm that.

“But, if it is correct, you will not be covered under the Financial Services Compensation Scheme or be able to take any complaint to the Financial Ombudsman Service.”

The FSA is continuing its enquiries.

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