FOS says mis-selling to elderly and vulnerable continues

The Financial Ombudsman Service (FOS) said the number of complaints it receives about high risk investments being sold inappropriately remains “significant”.

In its consultation for its 2012/13 plan and budget, the Ombudsman said the number of cases it handled in 2011/12 involving investments has declined by 3% to 15,100.

However, it said it continues to see several complaints from customers "who found they had invested in products which carried greater levels of risk than they had anticipated".

Often investors complained the description of the underlying investment given to them by a salesperson or adviser was inaccurate, the FOS said.

The report said there were several cases in which "highly unsuitable" products were sold to the elderly or very inexperienced investors.

Cases relating to payment protection insurance (PPI) mis-selling were almost double the number the FOS expected.

Having planned to receive 60,000 complaints following the results of a judicial review examining PPI sales practices in April, the actual number of cases the FOS will have received by April is likely to be 145,000, the report said.

Overall, the Ombudsman expects to receive 114,200 new cases by the end of the 2011/12 period aside from those involving PPI.

Of these cases, around 71,000 will be related to banking and credit. Around 28,100 will be related to motor and general insurance, an increase of 34% on 2010/11's figures.