Financial Mis-selling

Believe you have been mis-sold a financial product? You may be entitled to compensation. Find out more about what financial mis-selling is, as well as when you are entitled to claim and how you can start the claim process.

What Is Financial Mis-selling?

Financial mis-selling is when banks or other financial companies sell you a financial product that is misleading or unsuitable. They may have sold it to you without discussing the specific risks or features, or the product may not be right for you based on your personal circumstances. Financial products include a mortgage, pension, loan, insurance or investment.

A company advising you to purchase a financial product is legally required to recommend something that is appropriate for your needs, and they must give a proper explanation concerning what the product can and cannot do.

For example, you might have been a victim of mis-selling if you were not provided with the information you needed to make an informed decision, the risks were not explained to you or you were given unsuitable advice – and you therefore ended up with a financial product or investment that was not right for you.

You may also have been mis-sold a financial product if you were not told about additional charges and fees that you incurred as a result of following advice, or if you were subjected to hard sales tactics that made you feel pressured into buying a product that you didn’t really want or need.

What mis-sold financial products can I claim for?

There are many different types of financial products that can be mis-sold. Some of the most common include:

Mortgages

You may have been mis-sold a mortgage if you weren’t advised about the commission your adviser would get from the lender or if the end date of the loan is after the date you are due to retire. Other instances where you may be able to make financial mis-selling claims include if you were advised to switch to a different lender and weren’t told about penalties and fees you would incur, or if you were advised to overstate your income or self-certify when applying for the loan.

Investments

You can’t seek compensation just because an investment performed badly. Some investments are inherently risky, and if you choose to take a gamble, you have to be willing to accept that it may not pay off. However, you can make a complaint if you weren’t informed about the risks involved. You may also be eligible for compensation if you weren’t given the details of how your money would be invested or if the product was not a fitting match for your attitude to risk or your needs as discussed with the adviser.

Insurance

Mis-selling can occur with many types of insurance, from personal accident policies to life insurance. Examples of mis-selling include being pressured into buying financial protection, not being told about relevant exclusions to the policy, being told that the cover was compulsory and not having the full terms explained to you.

Other types of financial products that can be mis-sold include:

• Annuities
• Pensions
• Loans

A financial mis-selling claim will generally be completed in less than 12 months. In most instances, it’s more likely to take a few weeks to several months.

How Can I Start The Claim Process For A Mis-sold Financial Product?

If you believe you have been a victim of financial mis-selling, you can take action against those responsible.

The first step is to make a formal complaint to the company involved. Make sure you explain the issue clearly to the provider, and if you have written evidence, send a copy as proof. However, don’t worry if you don’t have such proof; it isn’t essential.

The company has eight weeks to respond to your complaint. If you don’t receive a response within this time period, or you are unhappy with the firm’s final response, you can take the matter further.

The second step would be to contact the Financial Ombudsman Service (FOS) or Pension Ombudsman. You have up to six months to complain to the FOS and, in the case of the Pensions Ombudsman, up to three years from the date you were mis-sold a financial product, or became aware that you were mis-sold a product.

If both of these steps prove unsuccessful, the third step would involve making a claim. To help ensure you get the best possible compensation package, you can contact a financial mis-selling solicitor. They will be able to advise you on the strength of your claim and handle every detail of your complaint.

Fees And Compensation For Mis-selling Claims

The compensation you may receive is designed to put you in the same position you would have been in if you hadn’t been mis-sold the financial product. For example, you might receive a refund of all the money you outlaid, and this could be in the form of a fixed sum or instalments.

A lawyer will be able to advise you on the amount of money you may be entitled to.

With regards to fees, there will be no fee to pay if the complaint is resolved by the financial product provider or the FOS. Should you choose to make a claim through a solicitor, they may have a ‘no win, no fee’ policy that means you pay nothing should you receive no compensation or lose your claim. If you win, you may need to pay a ‘success fee’ to the solicitor or firm. This can be up to 25% of the total compensation amount (but can legally be no more).

How Soon Do I Need To Make A Financial Mis-selling Claim?

You should aim to make a complaint to your initial product provider as soon as you notice a problem or believe you have been mis-sold a product. The company has up to eight weeks to respond.

Should you make your case via the FOS, this must be done within six months of receiving a final response from the financial provider. You must also contact them up to three years after you realised you had been mis-sold a product. Once the three years have passed, the FOS will be unable to review your case.

For financial mis-selling claims made through a solicitor, you have up to six years from the purchase date to make your claim.