Time limit for mis-selling claim

Uncertain

Can anybody tell me if there is a time limit for making a mis-selling claim about an "investment".

I have recently found the paperwork filled in by a so-called advisor (i.e salesman) regarding an product I bought about 15 years ago and sold at a loss seven years later.

I fully understand that the fact it lost money does not, in itself, amount to mis-selling but I feel the paperwork shows that they didn't do a proper fact finding exercise and that they significantly understated the risk.

Any views?

lvader

Was it your choice to sell at the bottom of the market in 2003-4? Or were you advised to sell at a loss?

Uncertain

lvader wrote: »

Was it your choice to sell at the bottom of the market in 2003-4? Or were you advised to sell at a loss?

Other products bought around the same time showed a worthwhile return.

In any case the dates in my post are very approximate and I feel the paperwork shows mis-selling so my question was simply is the claim out of time?

lvader

So the good investments weren't missold but the one that didn't do well was? It still looks like poor timeing from your part. Everything was well down due to coming down from .com boom, 911 and the Iraq war. Had you left it a few more years I'm sure it would have done much better.

dunstonh

You are timebarred if it is more than six years after the event complained about or – if it gives the consumer more time – more than three years from the date the consumer became aware (or should reasonably have become aware) that they had cause for complaint.

So, in this case, you are likely timebarred from complaint.

but I feel the paperwork shows that they didn't do a proper fact finding exercise and that they significantly understated the risk.

In most cases you dont see the factfind details. Experienced advisers could complete a factfind without you ever realising that is what you are doing as most questions can be asked and answered in conversation.

Investment returns are not something you can complain about.

Incorrect risk assessment is something you can complain about but just because you take a risk and it doesnt pay off in that period does not mean you can complain. However, if you made a complaint on risk, they (including the FOS) dont just take your word for it. They look at your investment history and assess your ability to understand risk. If you have jumped right up the risk scale uncharacteristically, then the onus is on the adviser to show why. However, if you are within the range you would expect to be and an investment matched that but suffered an unusually high loss that was not typical of the investment then a complaint will not likely be upheld.

You mention other "products" that showed a worthwhile return. What were they and where do they appear on the risk scale (if you dont know where, we can say).

Had you left it a few more years I'm sure it would have done much better.

The five years that followed saw many people double their money or not far off.

Uncertain

lvader wrote: »

So the good investments weren't missold but the one that didn't do well was? It still looks like poor timeing from your part. Everything was well down due to coming down from .com boom, 911 and the Iraq war. Had you left it a few more years I'm sure it would have done much better.

No and no, as it happens in this case!

Uncertain

dunstonh wrote: »

You are timebarred if it is more than six years after the event complained about or – if it gives the consumer more time – more than three years from the date the consumer became aware (or should reasonably have become aware) that they had cause for complaint.

So, in this case, you are likely timebarred from complaint.




In most cases you dont see the factfind details. Experienced advisers could complete a factfind without you ever realising that is what you are doing as most questions can be asked and answered in conversation.

Investment returns are not something you can complain about.

Incorrect risk assessment is something you can complain about but just because you take a risk and it doesnt pay off in that period does not mean you can complain. However, if you made a complaint on risk, they (including the FOS) dont just take your word for it. They look at your investment history and assess your ability to understand risk. If you have jumped right up the risk scale uncharacteristically, then the onus is on the adviser to show why. However, if you are within the range you would expect to be and an investment matched that but suffered an unusually high loss that was not typical of the investment then a complaint will not likely be upheld.

You mention other "products" that showed a worthwhile return. What were they and where do they appear on the risk scale (if you dont know where, we can say).



The five years that followed saw many people double their money or not far off.

Thanks for that far more useful response.

Last sentence first - not in this case.

Time - I feared as much. Maybe arguable on the "should reasonable have known point".

"In most cases you dont see the factfind details. Experienced advisers could complete a factfind without you ever realising......"

So how do I know he didn't put down a load of nonsense or even, if the company produce something, they didn't make it up later?

The "advisor" concerned left the company within months of this sale - does that help?

dunstonh

Time - I feared as much. Maybe arguable on the "should reasonable have known point".

You fail the 6 year rule. I would put the three year rule from the date of encashment as that is where you acted on your "displeasure"

So how do I know he didn't put down a load of nonsense or even, if the company produce something, they didn't make it up later?

you dont. In a complaint, the factfind would be supplied to the complaints handler. However, the most important document is the suitability report. The suitability report should contain a basic summary of the key points that affect the advice (or some firms include a copy of the factfind with the suitability report but reduce the content in the suitability to not duplicate). Typically, you are free to request a copy of the factfind on demand.

If the factfind was full of nonsense, then it makes it easier for a complaint to be upheld. The FSA does not actually define what a factfind is and what should be in it. It just says you should "know your customer". Whilst factfinds all look different in layout, most of them will contain the same core facts (name, address, date of birth, employment details, assets and liabilities). A lot of what is in the core part of the factfind has little relevance on advice. That comes from soft facts and discussion on objectives, opinions etc. Hard facts help you decide some things but most of what is useful comes from soft facts.

The "advisor" concerned left the company within months of this sale - does that help?

No. Just because he moved on, does not mean what he did was wrong. He may have had a better offer or moved on up in his career path or whatever. In isolation it doesnt mean a thing.

Uncertain

dunstonh wrote: »

You fail the 6 year rule. I would put the three year rule from the date of encashment as that is where you acted on your "displeasure"

Thanks again.

I suppose the only possible argument here is that I didn't become aware of the mis-selling until I found the original paperwork recently.

I think there is quite a strong case to be made from the content of the paperwork so I suspect they will do their very best to argue it is out of time.

If I could prove (as I strongly suspect) that the advisor was sacked for misconduct would that help?

dunstonh

I suppose the only possible argument here is that I didn't become aware of the mis-selling until I found the original paperwork recently.

Possible. What is your evidence of mis-sale?

Remember that you will only have part of the paperwork. So, what is it in what you have that you feel shows wrong doing?

If I could prove (as I strongly suspect) that the advisor was sacked for misconduct would that help?

No. When you use an employee, the employer carries the liability and if they sacked the individual due to misconduct they would have a duty to look at anything that was linked to the reasons of the dismissal, assuming it was business related (and wasnt caught with the bosses wife and the christmas party!)

What is it about this particular investment that makes you think it is higher risk than your other investments which you are happy with? Forget performance. If you can get a complaint through the time bar then lets look at what the crux of your complaint is.

Uncertain

dunstonh wrote: »

If you can get a complaint through the time bar then lets look at what the crux of your complaint is.

I agree. Obviously the rights and wrongs are irrelevant if it is time barred.

I have a reasonable handle on what constitutes mis-selling and I'm convinced there is at least an arguable case here. If need be I'll come back for more advice on that but for now I'd rather not make the details public.