Mis-Sold Financial Product Claims: Get Compensation in 2025

Common Examples of Mis-Selling

You may have been mis-sold a financial product if:

• Incomplete information: You weren't told about risks, fees, charges, or key terms. For example, an investment advisor failed to explain that your capital was at risk, or a mortgage broker didn't disclose early repayment penalties.
• Unsuitable recommendation: The product didn't match your needs, circumstances, or risk tolerance. A classic example: selling a high-risk equity investment to a risk-averse retiree who needed income, not growth.
• Pressure or hard-selling: You were rushed into a decision, given false urgency ("this offer ends today!"), or felt you couldn't say no. PPI was often added to loans without customers realizing or consenting.
• Misleading statements: You were told the product was "guaranteed," "risk-free," or "always goes up," when these claims were false. Mis-sold investments often involved exaggerated return projections.
• Hidden commissions: The advisor received a financial incentive to sell you a specific product but didn't disclose this conflict of interest. This was rampant before FCA rules required commission disclosure.
• Failure to assess suitability: The firm didn't ask about your financial situation, goals, or experience before recommending a product. By law, advisors must conduct suitability assessments for most products.
• Ignoring instructions: You specifically asked for a low-risk, easily accessible product, but the advisor sold you something high-risk or long-term. This is particularly common with pensions and investments.

If any of these apply to you, you likely have grounds for a mis-selling claim. The key question the FOS asks is: "Would this consumer have bought this product if they had been given clear, fair, and accurate information?"

1. PPI (Payment Protection Insurance)

PPI was designed to cover loan or credit card repayments if you couldn't work due to illness, accident, or unemployment. However, it was systematically mis-sold on a massive scale between the 1990s and 2010s, resulting in £30+ billion in compensation.

Common PPI mis-selling scenarios:

• You were told PPI was compulsory to get the loan or credit card (it wasn't)
• PPI was added without your knowledge or consent
• You were ineligible for PPI (e.g., self-employed, unemployed, or had pre-existing medical conditions that excluded you from claiming)
• The cost of PPI was not clearly explained
• You were sold single-premium PPI (the entire cost added to the loan upfront, accruing interest)

Note: The general PPI deadline was August 29, 2019. However, exceptions exist (see FAQ below).

2. Pensions & Retirement Products

Pension mis-selling can have devastating consequences, as victims may lose decades of retirement savings. Common forms include unsuitable transfers, high-fee products, and risky investments.

Common pension mis-selling scenarios:

• Defined benefit (DB) to defined contribution (DC) transfers: You were advised to transfer out of a secure final salary pension into a riskier DC scheme. This is rarely in the consumer's interest and has been a major source of mis-selling.
• Self-Invested Personal Pensions (SIPPs): You were advised to invest your pension in high-risk, illiquid, or unregulated assets (e.g., overseas property, renewable energy schemes) that lost value.
• Pension liberation / early access: Before age 55, someone offered to help you access your pension early (usually illegal and resulting in massive tax charges).
• High-fee pensions: You were switched to a new pension with excessive charges that eat into your retirement fund.

Pension mis-selling claims can be worth £100,000+ due to the compounding effect of losses over time.

3. Mortgages & Secured Loans

Mortgage mis-selling typically involves being sold a mortgage that was unaffordable or unsuitable, or not being told about cheaper alternatives.

Common mortgage mis-selling scenarios:

• Interest-only mortgages: You were sold an interest-only mortgage without adequate explanation that you'd need to repay the full capital at the end, or without a credible repayment plan.
• Endowment mortgages: You were sold an endowment policy to repay your mortgage, but the policy underperformed and left a shortfall.
• Affordability not properly assessed: The lender approved a mortgage you couldn't realistically afford based on your income and expenses.
• Self-certification mortgages: The broker inflated your income on the application without your knowledge (pre-2008 financial crisis).
• Not told about standard variable rate (SVR) costs: The true cost after the initial fixed period ended wasn't explained.

4. Investments & ISAs

Investment mis-selling occurs when you're sold investments that don't match your risk profile, experience level, or financial goals.

Common investment mis-selling scenarios:

• High-risk investments for low-risk investors: You wanted capital preservation but were sold volatile stocks or speculative funds.
• Unregulated investments: You were sold overseas property, land banking, carbon credits, or other unregulated schemes that lost value or turned out to be scams.
• Failure to diversify: All your money was put into one asset class or region, concentrating risk.
• Structured products: Complex investments with hidden risks, capital at risk, or illiquidity.
• Excessive trading (churning): Your advisor made frequent unnecessary trades to generate commissions, eroding your investment value through fees.

5. Insurance Products (Beyond PPI)

Various insurance products have been mis-sold, often because the policy didn't match the customer's needs or contained exclusions that made it worthless.

Common insurance mis-selling scenarios:

• Whole-of-life policies: You were sold an expensive life insurance policy when you only needed temporary coverage (term life would have been cheaper and more suitable).
• Critical illness cover: The policy had so many exclusions or restrictive definitions that you couldn't claim when you became ill.
• Income protection: The waiting period or policy terms made it unlikely you could ever claim.
• Travel insurance: Add-on travel insurance sold with holidays at inflated prices, often with duplicate coverage.

FCA: Treating Customers Fairly

The Financial Conduct Authority (FCA) regulates financial services in the UK. Its core principle is "Treating Customers Fairly" (TCF), which requires firms to:

• Provide clear, fair, and not misleading information
• Ensure products meet customers' needs
• Give appropriate advice based on customers' circumstances
• Avoid conflicts of interest or disclose them clearly
• Handle complaints fairly and promptly
• Provide adequate after-sales service and support

If a firm violated any of these principles, you have grounds for a complaint. The FCA can take enforcement action against firms, including fines and bans, but it doesn't handle individual compensation—that's where the FOS comes in.

Financial Services Compensation Scheme (FSCS)

The Financial Services Compensation Scheme (FSCS) protects consumers when FCA-regulated firms fail. If the firm that mis-sold to you has gone out of business, you can claim from the FSCS.

FSCS coverage limits:

• Deposits: Up to £85,000 per person per firm
• Investments: Up to £85,000 per person (but full compensation may be available for certain pension and long-term insurance claims)
• Insurance: 100% of compulsory insurance (e.g., motor third-party), 90% of other insurance

The FSCS is free to use. Visit fscs.org.uk to check if your firm has failed and to make a claim.

Step 1: Gather Evidence

Before contacting the firm, collect all relevant documents. While the FOS can investigate without paperwork, strong evidence significantly increases your chances of success.

Useful evidence includes:

• Sales documents: Contracts, application forms, terms and conditions, product brochures
• Correspondence: Letters, emails, recorded phone calls, meeting notes
• Statements: Account statements, premium payment records, investment performance reports
• Proof of circumstances: Documents showing your financial situation, health, employment status at the time
• Records of what you were told: Notes from sales meetings, advertising materials

Don't have documents? Request them from the firm. They must keep records for at least 6 years (longer for pensions) and provide copies if you ask. You can also submit a Subject Access Request (SAR) under GDPR to obtain all data the firm holds about you.

Step 2: Complain to the Firm

You must complain directly to the firm before escalating to the FOS. Send a clear, detailed complaint explaining what happened and why you believe you were mis-sold the product.

Send your complaint by: Email (request read receipt), online complaint form, or recorded delivery post. Keep copies of everything.

The firm has 8 weeks to investigate and respond. They will either uphold your complaint and offer compensation, or reject it with a "final response letter."

Step 3: Escalate to the Financial Ombudsman Service

If the firm rejects your complaint, or doesn't respond within 8 weeks, you can escalate to the FOS—a free, independent body that resolves disputes.

How to contact the FOS:

• Online: financial-ombudsman.org.uk/consumers/complaints/make-a-complaint
• Phone: 0800 023 4567 (Monday-Friday, 8am-8pm; Saturday, 9am-1pm)
• Post: Financial Ombudsman Service, Exchange Tower, London E14 9SR

What happens next: The FOS will review your complaint, request information from the firm, and make an independent decision. The process typically takes 3-6 months (longer for complex cases). The FOS decision is binding on the firm but not on you—if you disagree with the outcome, you can still pursue legal action.

Important: You have 6 months from the date of the firm's final response letter to contact the FOS. Don't delay.

Step 4: Legal Action (If Needed)

If the FOS doesn't uphold your complaint, or if your claim exceeds the £415,000 limit, you can pursue legal action through the courts. This is more complex and expensive, but may be worthwhile for high-value claims.

When to consider legal action:

• Your losses exceed £415,000 (the FOS limit)
• The FOS rejected your claim but you have strong new evidence
• The firm has gone bust and FSCS coverage is insufficient
• You want to pursue additional damages (e.g., for fraud or negligence)

Many solicitors handle financial mis-selling cases on a "no win, no fee" basis, meaning you only pay if you win. Consult a specialist solicitor for advice on your specific case.