How To Avoid Being Mis-sold A Financial Product
As the 2019 deadline for seeking PPI compensation starts to move closer, you’ll see plenty of adverts and news articles reminding you to consider claiming – and if you haven’t looked into it yet then it might be worthwhile.
However, it’s also important to make sure that you don’t fall into the trap of being mis-sold a different financial product.
Professional advice is extremely important, but you need to have your own back too. Here are some tips for avoiding being ripped off, or sold something that you simply don’t need.
What counts as financial mis-selling?
Financial mis-selling is just what it sounds like: being sold a financial product that isn’t right for your needs, or being given misleading advice or information. This might involve misrepresentation of the product itself, or of the contract attached to it.
While customers in this situation can make a complaint, and claim back some of the money they end up losing, it can save a big headache if you spot foul play before signing on the dotted lines…
Steps to protect yourself
A lot of mis-selling happens because unscrupulous companies or individuals think they can take advantage of the fact their customers won’t understand a complex financial product.
Make sure that you’re a savvy buyer by considering what your needs are very carefully, and use the internet to find out what products have helped other people with similar circumstances.
Once you know what you’re looking for, read up on the details of particular products so that you understand the terminology used and the long-term implications.
This will help to ensure that you understand what you’re being sold, so that you can make an informed decision about whether it’s right for you.
Speak to family and friends
Your family and friends may not be financial experts (so much the better if they are!), but they are the people who have your best interests at heart.
If you’re unsure about a particular product or service, talk it over with somebody that you’re close to and see whether they can spot anything misleading or concerning.
Check every last detail
Reading the small print can be tedious, but it’s absolutely essential when dealing with financial services. Even more important than reading the small print is ensuring that you actually understand it – if there’s something you’re struggling to decipher then you may want to ask somebody to read through it with you.
This should include checking exactly what fees could apply: know what you’re being charged for now, and what you could be charged for in the future.
Consider getting additional independent advice
If possible, you may also want to consult with a separate financial adviser – somebody who is not involved in selling the product that you are looking into.
While this may not always be possible, the expertise of an adviser that you trust can help you to avoid any unexpected surprises.
Hopefully, you won’t find yourself being mis-sold to in the future, but if you follow these tips then you’ll be more likely to spot the signs if it does happen.
Think of it this way: if the product is being sold ethically then you won’t have lost anything – but if it isn’t, you could save yourself a lot of trouble!
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