Financial mis-selling: what to do if you’re affected

Things to remember about financial mis-selling:

• It’s not about whether you lost money – even if you didn’t lose out, if the product isn’t right for you (perhaps because it’s a riskier investment than you are comfortable with) you can still make a complaint about financial mis-selling.
• However, you can’t complain just because an investment performed badly.  Some investments are risky, and if you take a gamble you must accept that you might lose money. But you can complain if you weren’t told about the risk.
• It's not just about investments either.  If you have been sold a mortgage or life insurance or protection product that is not suitable for your circumstances, you may have a case for mis-selling. 

Some ways you might have been mis-sold a mortgage:

• your mortgage end date is after your retirement date
• you weren’t told about the commission the adviser would receive from the lender
• you were advised to self-certify (borrow money without proving your income) or overstate your income in order to borrow more
• you were advised to switch lenders and weren’t told about the fees and penalties
• you were given a fixed-rate mortgage and told to remortgage to a better deal later, then incurred penalties for leaving the fixed rate early.

Some ways you might have been mis-sold your investment:

• you weren’t told about the risk involved
• you weren’t told how your money would be invested
• the product didn’t suit your needs or attitude to risk that you discussed with the adviser.

If you want to complain to the Financial Ombudsman Service there is a time limit of six years from when you were sold the product, or three years from when you noticed (or ought reasonably to have become aware) something was wrong – whichever is later.

But before going to the Ombudsman you need to complain to your provider. Read on to understand the process you need to follow.

If you have a dispute with a personal or workplace pension scheme that you can't resolve with the scheme, you can ask the Pensions Ombudsman to look into it for you. 

You don’t have to find concrete proof, but you do need to explain your problem.

• Be clear, concise and stick to the facts.
• Gather all the relevant information and any written proof.
• Make copies of any relevant paperwork you have from when you signed up for the product

• Ask for a copy of the company’s internal complaints process – all companies should have one. It’ll tell you who to contact. Often you can find this on the company’s website.
• The company has eight weeks to respond. If they don’t get back to you, you can go straight to the ombudsman service.
• If you are unhappy with the company’s final response, you have six months to take your complaint to the Financial Ombudsman Service.

If the firm has gone out of business, you might still be able to get compensation – see the section further down the page.

If you’re not happy with the firm’s response to your complaint, raise the matter with the Financial Ombudsman Service. 

There’s a limit to the amount of compensation you can receive for financial loss after your case has been looked at by the Financial Ombudsman. In some cases, the resolution might not include financial compensation at all.

From 1 April 2022, the compensation limit will change from £350,000 to £375,000 for complaints received after this date.

For complaints about actions that happened before 1 April 2019, this limit is reduced to £160,000.

These limits should be adjusted every year to make sure they keep pace with inflation.

Even if the firm has gone bust and can’t afford to pay you anything, you might be able to get compensation from the Financial Services Compensation Scheme.

Think twice before paying a complaints company to make your complaint.

You can get the same help for free from the Ombudsman Service, and you’re just as likely to win.