The Financial Conduct Authority (FCA) - which regulates financial services and markets in the UK - states that financial services must be sold to you in a way that is fair, clear and not misleading.
Financial mis-selling can occur when you experience one or more of the following when buying a financial product:
This is the most widely known example of financial mis-selling. All claims for mis-sold PPI compensation must now be started by August 2019.
This form of financial mis-selling can occur if you were advised to borrow money without proving your income (also called self-certifying) or asked to overstate your income in order to borrow more.
You might have also been mis-sold a mortgage if you were advised to switch lenders without being informed of the fees and penalties.
If you were given a fixed-rate mortgage and told to remortgage to a better deal later on, and incurred penalties for leaving the fixed rate early, this might also be a case of mis-selling.
If you weren’t given the correct information or weren’t told how your money would be invested or the risk involved with that investment, you might have been mis-sold the investment product.
Mis-selling of investment products can also occur if you discussed your needs and attitude to risk with the adviser and you find the investment product sold to you doesn’t match this.
Just over a fifth of the claims the Financial Services Compensation Scheme (FSCS) handled in 2017/18 arose from pensions advice – mainly relating to the transfer of retirement savings out of an occupational scheme into a SIPP with a view to making illiquid and risky investments.
SIPPs allow you to hold multiple investments and products, so you can manage your pension fund yourself and have more control over where it’s invested.
But SIPPs are considered riskier than most personal pension schemes, and were created to allow experienced investors the opportunity to take more risks.
Because of the risky nature and high fees associated with SIPPs, it is widely believed they shouldn’t have been recommended to the unsuspecting general public.
If you lost a large portion of your pension fund as a result of poor advice, corrupt advisers, hard sales or pressure selling or a lack of advice given on the high fees associated with SIPPs, it is likely you were mis-sold.
Explain the problem to your provider. Be as clear as possible about why you think you were mis-sold the financial product.
If you have written evidence it will help your complaint to send a copy of this as proof, but this isn’t essential.
As for the provider’s complaints procedure - they should have one.
After you’ve made your complaint, the firm has eight weeks to respond.
If they don’t get back to you, go straight to the ombudsman service and ask them to investigate.
The FOS has a time limit of six years from when you were sold the product, or three years from when you noticed (or reasonably became aware) something was wrong – whichever is later.
You have three years from when you were mis-sold to make a complaint. If you became aware that you were mis-sold later, you can apply within three years of becoming aware of this.