What is mis-selling? | A Guide to Financial Mis-selling
Published on:
Financial mis-selling is on the rise. However, for some it remains unclear what constitutes financial mis-selling and what you should do if you believe you have indeed been mis-sold to. Below we go into more detail about financial mi-selling, including what to look out for and how you can take action
What is financial mis-selling?
Financial mis-selling occurs when you have been given unsuitable advice from a professional company or advisor whose services you have paid for. This includes not fully explaining the risks involved in something, not explaining the various options available to you, or not providing you with the full information you need to make a decision, leading you to buy a product that is unsuitable for your needs.
What are some examples of financial mis-selling?
One of the biggest scandals of recent years involves the mis-selling of pensions. New freedoms giving people greater choice on how they use their pension pots were introduced in 2015. However, this has led to many people being mis-sold pensions. The rise in pensions mis-selling claims shows just how many people have lost out due to poor advice.
The mis-selling of pensions can include in several different ways, including:
- Mis-sold Annuities
- Mis-sold Pension Transfer
- Mis-sold SIPPS
- Mis-sold FSAVCS
The most common features of pension mis-selling include:
- Advisers not considering your health or medical issues
- Advisers withholding information, or not providing you with all the information needed
- Advisers encouraging you to transfer your pension into a SIPP, invested in risky sectors
- Advisers not presenting all the options available to you
Another common form of financial is the mis-selling of investment products. Mis-sold investments are defined as “The negligent, deliberate or reckless sale of an investment, where the investment was misrepresented or unsuitable for your needs.”
Many different investments can be mis-sold, include:
- Mis-sold Stocks and Shares ISAs
- Mis-sold Managed Portfolios
- Mis-sold With Profit Bonds
- Mis-sold Investment Bonds
- Mis-sold PEPs
- Mis-sold Open-Ended Investments
- Mis-sold Unit Trusts
- Mis-sold Capital Protected Bonds
The most common features of pension mis-selling include:
- Advisers not telling you about the risks involved
- Advisers not telling you how much money you could lose over the investment
- Advisers not explaining clearly how the investment product worked
- Advisers not explaining how your money would be used and invested
- Advisers telling you to invest in a product that doesn’t match the requirements previously discussed with them
What to do if you believe you’ve been mis-sold a financial product
If you believe you have been mis-sold a financial product there is usually a time limit of six years from when you were sold the product until the complaint is raised. Alternatively you have three years from when you first noticed a problem. These rules are not set in stone and often the advice of a professional or expert is needed.
Goodwin Barrett has successfully helped thousands of people win compensation as a result of unsuitable financial advice. If you think you’ve been mis-sold an investment or pension, or you’re unsure whether you qualify for a claim, one of our friendly advisers will be happy to speak to you.
If you qualify for a claim, you can choose to start our quick and easy compensation process and claim back what you may have lost.
Call us today on 0808 163 1659 or email enquiries@goodwinbarrett.co.uk.
