If you suspect you’ve been mis-sold an investment, you have the right to complain about the advice you’ve been given. But you may have heard of the so-called ‘six year rule’ that applies to compensation claims – it means that a time limit can be applied if the advice you received was given over six years ago, and you may not eligible to claim compensation as a result.
This is often misunderstood. The bottom line is: no matter how long ago your investment was sold to you, you may still be eligible for compensation.
Banks and investment firms can only apply the time limit, known as time-barring, in certain scenarios. You can still make a complaint if you were mis-sold your investment more than six years ago – we’ve even helped clients claim compensation for investments bought over 15 years ago!
This is also true with a second, lesser known timescale. This one states that you should complain within three years after you first became aware there was a problem with the investment advice you were given. Often the banks will start the clock ticking when you surrender your investment, but you may not realise the advice was unsuitable until much later. In cases like these, you can still make a complaint.
The rule may or may not affect you. Ultimately your eligibility for compensation depends much more on the circumstances surrounding the sale of your investment. So, what do you need to know about time-barring?
The regulations and your claim
There are laws as well as regulations laid down by the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS) that govern compensation claims.
It’s important to know that you can make a complaint to a financial institution at any time, irrespective of when you invested your money. It’s the bank’s decision to apply time-barring – they can respond that they believe the complaint falls outside the relevant timescales – but even so, a case can still be referred to the FOS if there were exceptional circumstances which prevented you from making a complaint.
The six year rule is most likely to become a factor if you have to refer a complaint to the FOS, which is obliged to set limits on when complaints can be made to them. The important point is, even if you act after the time limit expires, they won’t necessarily reject your complaint outright. They simply require permission from the bank or firm in question before they can look into the matter.
Conclusion: navigating a path through time-barring
Regardless of the various regulations in place, all cases are judged on their own merits. What can be correct advice for one customer may be totally unsuitable for another. It’s essential that the adviser has followed all procedures correctly when giving you advice, and properly evaluated your personal and financial circumstances. The bank must show this has been done when investigating complaints.
According to an official statement made by the Financial Services Authority (now the FCA), “we do not consider it is in the interests of consumers to rule out the possibility of complaints being dealt with outside the 15 year period that would apply to court cases.” The FSCS (Financial Services Compensation Scheme) states that time-barring can be disregarded when “it is appropriate to do so”, and each claim is assessed individually.
If you’re looking to claim compensation for an investment that was mis-sold some time ago, you should not be concerned about the issue of time-barring. Contact or call us to speak to a claims specialist and they will guide you on the best way to make a claim.