money for jam?

When people retire their dreams are often simple. They want to have enough money for a comfortable retirement .They hope to have enough super to maybe pay for a well-earned holiday. They want to be secure with a well-earned roof over their head. They want to spend time with their families and grand-children.  And be able to pay for quality medical care and later nursing home expenses.

After all many of these people paid taxes for fifty years and went without luxuries to build a nest egg  and pay off a mortgage.

Some of those people will be worried today. Especially some asset-rich pensioners and retirees who were also  cash poor. The assets were there but the cash wasn’t.

They got involved with a company called Money For Living. On the surface it probably sounded plausible for some people. Money For Living would buy a retiree’s house. The seller would be guaranteed lifetime tenancy, plus home insurance cover and maintenance costs. And there would be a regular income stream. What sellers were probably aware of was that Money for Life on-sold about 80 properties to third parties. Where was the guarantee that the new owners  would keep making regular payments to a former owner who was now a tenant?

Swimming champion Dawn Fraser and actor-turned-broadcaster Paul Cronin appeared in advertisements for the scheme. Some commercials were aired here on 3AW.

I mention it today because Money For Living went into voluntary liquidation yesterday. Apparently the company had already attracted the attention of ASIC and Consumer Affairs Minister Marsha Thomson  has urged people who signed contracts with the firm to contact a lawyer.  There is also a Consumer Affairs Hotline 1 300 55 81 81.

The Administrator, George Georges, said the monthly payments to the former owners would stop while an investigation was going on and maintenance payments would also end. But people were not about to be evicted.

Easy for him to say. Suddenly people who either owned, or virtually owned their own home, are now simply tenants at risk.

I don’t want to scare people but third parties who bought those on-sold houses from Money For Living probably have legal title and are one or two steps removed from the problem.

The sole director is one Gary O’Neil. Another director, Jolanta Olszewski resigned late last week.

They called it Money for Living. For some people it must have sounded like money for jam.

But, as I have said before: if it sounds too good to be true…. It usually is.

Tuesday, September 27, 2005

©Copyright Derryn Hinch 2005