If your bank or another financial company sold you a product that was not suitable for you, you may get compensation if you make a complaint. If you are unhappy with your firm’s response, the Financial Ombudsman Service or Pensions Ombudsman may accept and investigate your complaint.
What is financial mis-selling?
Mis-selling means that you were given unsuitable advice, the risks were not explained to you or you were not given the information you needed and ended up with a product that was not right for you.
As a non-financial example, say you were looking to buy a computer.
You told the shop assistant that you planned to watch DVDs on it, and they recommended a model.
Then you took it home and found that it did not have a DVD drive.
There is nothing wrong with the computer itself – it is not faulty, but it is not what you needed.
The computer was mis-sold to you.
It is just the same when you are sold a financial product.
The person who advises you to buy must recommend something suitable for your needs, and explain properly what it can and can not do.
They should make sure you know the risks. If they do not do this, you might be able to claim compensation.
Financial services must be sold to you in a manner that is “fair, clear and not misleading”.
Source: Financial Conduct Authority (FCA)
Key things to remember about financial mis-selling:
It is not about whether you lost money – even if you did not lose out if the product is not right for you – perhaps it is a riskier investment than you wanted – you can still make a complaint about financial mis-selling.
You can not complain just because an investment performed badly – some investments are risky, and if you take a gamble you have to accept that you might lose. But you can complain if you were not told about the risk.