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Your rights: If you have been mis sold a financial product

Financial mis selling happens a lot more than you might imagine and you could be a victim. It is very common in businesses who don't keep audit trails of conversations and so customers have no clear way of revisiting what was said. For this reason alone you should only communicate with reputable financial services businesses registered on the FCA register. These firms have a duty to sell financial products the right way and keep audit trails of communication.

If you feel you have been mis sold by a financial services company then you should complain to the company and bring your case to the financial ombudsman if you do not get the outcome you desire.

What is Financial mis selling?

If you were not given enough information to make a decision about a product or you were sold a product that was recommended for you but isn't suitable for you then you may be a victim of financial mis selling.

The biggest financial mis selling debacle going on is the one about the Payment protection insurance, the PPI

When buying a financial product the adviser ha a duty of care to you. They should explain what the features of the product is, if it is suitable for you and what the risks are.

The sale process should be fair and not misleading in line with the Financial conduct authorities “treating customers fairly” policy.

Financial mis selling doesn't have to do with you losing money. If the product you are sold isn't suitable and you weren't given appropriate advice on the benefits, features and risks then you were financially mis sold.

On the other hand financial mis selling has nothing to do with underperformance of financial products such as stocks, bonds or cryptocurrencies. You can only complain if you were not well informed about the risk of the product.

Examples of financially mis selling in payment protection insurance(PPI)

  • you were pressured into buying a product that included PPI
  • You were sold a product that included PPI without your knowledge
  • you weren’t told about exclusions to the policy
  • you weren’t told that PPI could be purchased from other companies
  • you were unemployed or retired when you were sold the PPI
  • you were told that PPI was compulsory and that you had to take it out
  • nobody fully explained the terms and conditions of PPI
  • you weren’t told the rules about pre-existing medical conditions
  • you weren’t told how commission would work on the PPI
  • nobody asked if you had any other insurance which could cover the loan.

Examples of when a Mortgage has been Mis-sold(including endowments)

  • If your mortgage end date is after your retirement date then it is possible your mortgage advisor may have mis sold you the product by not looking carefully into your personal plans.

  • Mortgage brokers receive commissions from mortgage lenders. If you weren't told this in advance then it is very likely you were mis sold the mortgage.

  • If you were advised to self-certify (borrow money without proving your income) or overstate your income in order to borrow more

  • you were advised to switch lenders and weren’t told about the fees and penalties involved such as the early repayment fees for the old lender and the mortgage arrangement fee for the new lender then you may have been mis sold the mortgage.

  • You were given a fixed-rate mortgage and told to remortgage to a better deal later on, then incurred penalties for leaving the fixed rate early

Examples of when you have been mis sold an investment product

  • If you weren’t told about the risk involved in investing then it is very likely you were mis sold the product
  • If the product was added to another product you purchased
  • If you weren’t told how your money would be invested then it is very likely you were mis sold the product
  • the product didn’t suit your needs or attitude to risk that you discussed with the adviser then it is very likely you have been mis sold the product

What you should do if you have been mis sold a financial product?

If you have been mis sold a financial product you should first complain to the company involved and see if they will be able to resolve the issue. In most cases they should be able to.Companies have 8 weeks to solve a financial services complaint after which it can be taken to the ombudsman.

If you can't find the details relating to the case then you should contact the firm asking them to provide it to you. If they still refuse then you can file a subject access request demanding all the information the company holds on you.

The company will have 30 days to respond to this request and in some cases they may charge a fee.

You should be aware that you have a deadline of 6 years from when the incident occured to report your case to the financial ombudsman or 3 years from when you became aware of the issue.

In some limited cases the ombudsman may look at cases outside this time limit and in the case of the pension ombudsman the time limit is 3 years from when you complained about the issue and 3 years from when you became aware of the issue.

If the firm which you dealt with has now gone out of business you might be able to claim compensation from the financial services compensation scheme. You should inquire about this when you take your case to the relevant ombudsman.

How to complain to the financial ombudsman

Phase 1:

Gather all the proof you have about the incident. You will need emails, letters, phone conversations and anything else you feel might be relevant. If you can't find this and the incident happened within 5 years, the firm who is involved should still have all the information you need as they are required to hold your historical information for up to 5 years. You should use a subject access request to get this information. In some cases you might be required to pay a small fee

Phase 2:

Contact the financial ombudsman with all the information you have. The financial ombudsman will expect that you have given the company the opportunity to solve the complaint and if you haven't they may ask you to go back to this route and give it a chance before bringing your complaint back to them.You must contact the financial service ombudsman with 6 months of receiving the companies final response on the complaint.

Phase 3:

The financial ombudsman will look into the case to see and will come to a resolution on what should happen.You don't have to agree with the financial ombudsman's verdict and you can ask them to look into it further.

In some cases the financial ombudsman might refer you to the appropriate ombudsman to deal with your case as they cannot assist you

The financial ombudsman is a free service and they were set up by parliament to deal with consumer complaints. You should not pay for any service to assist you in handling consumer complaints.

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Your rights: If you have been mis sold a financial product
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