For many, the pandemic has been time to take stock. Furlough and working from home afforded us the time to get on top of many aspects of life, including finances.
Prompted by the offer of payment holidays and other pandemic-related support, attention turned to personal finances and the associated small print. It’s no coincidence therefore, that the number of complaints to the Financial Ombudsman increased by 2 per cent during the last financial year, and a staggering 91 per cent increase in complaints about investments and pensions.
There are many ways in which a financial product might have been mis-sold and reasons why an individual may require financial litigation services to claim for financial mis-selling.
Most commonly mis-sold products or services
Financial mis-selling relates to being given unsuitable advice, not having the financial risk associated with products properly explained and being given incorrect information – all ways in which you may end up with a financial product or service that is not right for you.
Mis sold Payment Protection Insurance (PPI)
Mis-sold PPI claims surpassed £38 billion this year and are the single largest category of financial litigation charges. While the date for mis sold PPI claims has passed, except for exceptional circumstances, a new court ruling potentially opens the door to further claims around concealment and non-disclosure of information.
Plevin PPI claims do not consider whether a financial product was suitable, rather whether a lender failed to disclose or deliberately concealed commission payments, making the relationship unfair. This is covered under a different area of law (Consumer Credit Act 1974) and has no deadline.
Mis-sold Mortgages and Endowments
If you were advised to borrow money without proving your income (self-certification) or asked to overstate your income in order to borrow more money, then you may have a case for claiming compensation for a mis-sold mortgage.
Similarly, if you were advised to switch lenders without being informed of the penalties, including if you were recommended a fixed rate mortgage and advised to switch to an alternative lender without being told about the financial penalties involved, then you may have been mis-sold.
Created as a niche mortgage product in the 1980s, Interest Only mortgages rose in popularity in the 1990s as inflation rates soared, enabling many to still be able to get onto the housing ladder. A high-risk product, around 1.67 million people have an interest-only mortgage and of these, many are at risk of losing their home when their mortgage term ends, their only option to sell their home to repay the debt. The Financial Ombudsman sees many complaints every year.
Mis sold Investment Products
If you discussed your attitude to risk and your needs did not match the riskier product you were sold, or you were given incorrect information about the investment or were not explicitly told how your money would be invested, you might have grounds to make a claim for compensation.
Mis-sold self-invested personal pension (SIPP)
Over a fifth of annual claims to Financial Services Compensation Scheme (FSCS) arise from mis-sold pensions, mainly relating to the transfer of savings from an occupational (work pension) into a personal pension, which may be of higher risk or result in reduced personal liquidity.
Eligibility to claim
A claim can be made for many reasons, including:
- Your personal circumstances were not properly considered
- You were not fully advised of the risks relating to the investment
- The amount of money invested was not disclosed to you
- Commission/fees were not shared with you.
What to do if you believe you have been mis-sold
Approach you service provider who should have a clear and transparent complaints procedure. Be as clear as possible with your complaint and provide as much written evidence as you can in support of your complaint. Your provider is obliged to respond within 8 weeks of receipt of your complaint.
If unhappy with the provider’s advice, the next step is to elevate your complaint to the FOS which has a time limit of 6 years from when you were mis-sold the product (or 3 years from when you noticed or reasonably became aware) in order to respond.
Seek legal advice
At RHL Solicitors, our team of financial litigation and mis-selling experts aim to secure an accurate settlement of our clients’ losses in accordance with their best interests.
On scrutiny of the information, we will assess the value of the losses and identify the irregularities that will form the heads of claim. Where settlement before action is not possible, we will instigate proceedings to obtain remedy from the Court.
If you believe you have been mis sold a financial product, be it insurance, a mortgage, or a pension, get in touch.