Financial mis-selling occurs when a bank, financial adviser, or other regulated firm sells you a product that is unsuitable for your needs, circumstances, or risk appetite, or provides inaccurate or misleading information about a product that leads you to buy it. Mis-selling can affect mortgages, pensions, investments, insurance, and loans.
Payment Protection Insurance
PPI was the largest mis-selling scandal in UK history, resulting in over £38bn in redress. While the official deadline for new PPI complaints passed in August 2019, you may still be able to claim if you did not know you had PPI at the time, if the policy was added without your consent, or if there are other exceptional circumstances. Dormant or old policies may still be worth investigating.
Pension mis-selling
Pension transfers — particularly from defined benefit (final salary) schemes to defined contribution schemes — have been a significant source of mis-selling claims. Advisers were required to demonstrate that the transfer was in the client’s best interests. Where advice was given without properly assessing the client’s circumstances, attitude to risk, or the value of the guaranteed benefits being given up, the advice may have been negligent.
Investment mis-selling
Regulated investment advisers must follow FCA rules on suitability — recommending only products appropriate to the client’s risk profile, investment objectives, and financial situation. Placing a cautious investor in high-risk investments, failing to explain charges adequately, or recommending products in which the adviser had an undisclosed financial interest can all constitute mis-selling.
How to complain
Start by making a formal written complaint to the firm, setting out the basis of your complaint and what redress you seek. The firm has 8 weeks to respond. If you are dissatisfied with the response — or if 8 weeks pass without a response — you can take your complaint to the Financial Ombudsman Service, which is free for consumers and can award up to £415,000 per case. You do not need a claims management company — the FOS is designed to be accessible to consumers directly.
Claims management companies
Claims management companies (CMCs) advertise heavily for financial mis-selling claims and charge success fees of 25–40% of any compensation you receive. You have exactly the same access to the FOS as a CMC does — the process is the same, the same information is available, and the same result is achievable. Given the FOS is free, using a CMC significantly reduces what you actually receive. Legitimate solicitors can also assist with more complex or high-value claims.
If you believe you have been mis-sold a financial product, start by complaining to the firm directly. If unsatisfied, take your complaint to the Financial Ombudsman Service.