10 DEC 2020

How to Handle a Mis-Sold Financial Product

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How to Handle a Mis-Sold Financial Product

Some individuals of working age will enlist the help of a financial advisor to secure future assets. However, some fraudulent advisors will pressure their clients into making high-risk investments without detailing the scope of the gamble. Thus, investors lose large sums of money because of crooked information. If you feel you’ve been mis-sold a financial product, learn how to mitigate the circumstances best.

 

What is Financial Mis-Selling? 

To effectively navigate a financial mis-selling is to learn its definition first. In the U.K., the Financial Conduct Authority (FCA) regulates financial services and markets, ensuring that investors receive products fairly. 

If you feel you’ve experienced financial mis-selling, it might be because: 

  • You received inadequate or unsuitable advice.
  • Your advisor did not outline the risks associated with the investment. 
  • You received lacking information when you took on the financial product, which ended up not being suitable for you. 
  • Your advisor withheld information regarding additional charges.  
  • You felt pressured into making an investment decision that wasn’t well-suited to your needs. 

 

What Types of Financial Products Get Mis-Sold?

Unfortunately, there are many ways an investor can get duped. Below are a few financial products that are commonly mis-sold. 

 

  • Payment Protection Insurance (PPI)

 

If you become unable to work, PPI pays out a sum of money to help you cover monthly mortgage, loan, or credit repayments. Now, investors can make claims for mis-sold PPI compensation. 

 

  • Mortgages and Endowments

 

Self-certifying refers to the act of borrowing money without providing proof of income or overstating how much you earn to secure approval. 

You might’ve also been mis-sold a mortgage if you were coerced into shifting lenders without being informed of any potential charges or penalties. Being told to remortgage out of a fixed-rate contract and incurring penalties might also be a form of mis-selling. 

 

  • Investment Products

 

Advisors are legally required to disclose how your money is going to be invested and outline the risks involved. If they don’t or choose to sell a mismatched investment product that doesn’t align with your needs, this could be evidence of mis-selling. 

 

  • Self-Invested Personal Pension (SIPP)

 

A SIPP allows users to hold multiple investments, allowing better control over pension funds. However, they tend to be riskier than traditional pension schemes, and thus shouldn’t be recommended to the general public.   

In the years 2017 and 2018, SIPP claims took up a fifth of those processed by the Financial Services Compensation Scheme (FSCS). The majority of complaints involved the transfer of retirement savings out of occupational schemes and into a SIPP. 

 

Where Do You Bring Up Complaints?

The first entity you’ll want to bring up your concern to is your provider. Let them know why you feel you were mis-sold a product. After filing a complaint, the firm will have eight weeks to respond. 

Alternatively, you can raise your complaint with the following two entities. 

 

  • FOS

 

If you find that the firm’s response was insufficient, you can take up your concern with the Financial Ombudsman Service. From there, the FOS will have an enforced response limit of six years from when you received the product or three years from when you observed it was insufficient. 

 

  • Pensions Ombudsman

 

If your complaint is pension-related, you can bring your complaint to the Pensions Ombudsman. However, you must do so within three years of receiving the product. 

 

Conclusion

Receiving a financial product that is not as it was described to you can be a challenging prospect to navigate. You might feel duped or simply not realise the implications of the product. If you find it within your right to make a case, don’t hesitate to do so!

If you need a hand filing a claim against a mis-sold product, submit your information to Consumer Reclaim. We work to provide you with the compensation you deserve. 

Consumer Reclaim Ltd is regulated by the Financial Conduct Authority in respect of regulated claims management activities, reference number: 835212. Registration is recorded at: https://register.fca.org.uk. Consumer Reclaim Ltd is registered in England and Wales, Company Registration number: 07223077. Information Commissioner Office number: ZA176000. VAT number: 144 4752 12