What to Do If You’ve Been Mis-Sold a Financial Product
Mis-sold financial products are a growing issue in Australia, leaving thousands of consumers facing unexpected losses. Whether it’s an unsuitable investment, unnecessary insurance, or a complex superannuation product, mis-selling occurs when financial products are sold without proper disclosure, advice, or consideration of your circumstances.
Under Financial Services and Tax Law, Australians have strong consumer protections. If you’ve been mis-sold a financial product, knowing your rights and the right steps to take is crucial to recovering your money.
What Is a Mis-Sold Financial Product?
A financial product is considered mis-sold when it was recommended or sold to you under misleading circumstances, without proper disclosure of risks, or in a way that didn’t suit your needs.
Common examples include:
Being advised to switch superannuation funds without clear benefits.
Purchasing an insurance product tied to a loan that you didn’t need.
Investing in complex schemes or managed funds without understanding the risks.
In Australia, financial advisers and institutions must follow strict regulations under the Corporations Act 2001 and ASIC Act. Any breach of these obligations could amount to mis-selling.
How Do You Know If You’ve Been Mis-Sold?
Identifying mis-selling isn’t always straightforward, but there are key warning signs:
The product wasn’t explained properly, or risks were hidden.
It does not match your financial goals or situation.
You were pressured into buying without enough time to consider.
You were advised to invest in high-risk products without proper risk assessment.
If any of these apply to you, you may have a valid claim. According to ASIC guidelines, financial advisers must act in your best interests, provide clear information, and ensure the product suits your circumstances.
Your Legal Rights Under Financial Services and Tax Law
Australian law provides several protections against mis-selling. The key frameworks include:
Corporations Act 2001: Imposes obligations on financial advisers to act in the client’s best interests.
ASIC Act: Prohibits misleading or deceptive conduct.
If these obligations were breached, you have the right to seek compensation for losses. The Australian Financial Complaints Authority (AFCA) provides a free dispute resolution service, and legal action may be necessary in complex cases.
Steps to Take If You’ve Been Mis-Sold
Gather DocumentationCollect contracts, product disclosure statements, account statements, and any correspondence with the adviser or financial institution.
Complain to the ProviderSubmit a formal complaint to the financial institution or adviser. They have up to 30 days to respond.
Escalate to AFCAIf the provider fails to resolve your issue, escalate the complaint to AFCA. You can lodge a complaint online at www.afca.org.au.
Seek Legal AdviceIf your case is complex, involves significant losses, or requires court action, speak to a lawyer experienced in Financial Services and Tax Law. They can advise on the strength of your claim and represent you in negotiations or litigation.
Time LimitsYou generally have six years from the date of loss to bring a claim, but this may vary depending on the circumstances.
How Legal Experts Can Help
A financial services lawyer can:
Assess whether the product was mis-sold under Australian law.
Negotiate with the provider for a settlement.
Represent you before AFCA or in court proceedings.
Financial Services and Tax Law can be complex, especially when dealing with large institutions. Having an expert on your side ensures you have the best chance of recovering your money.
Being mis-sold a financial product can be stressful and financially damaging, but you have rights. Acting quickly can increase your chances of getting compensation.
Don’t let financial mis-selling ruin your future—
Contact New South Lawyers today for a confidential consultation and protect your financial security.
