Loans, insurance, pensions, and investments are a cornerstone of modern life. They impact how we live, plan, and protect our futures. But let’s be honest: navigating financial products can sometimes feel like trying to read a map in a foreign language. There’s jargon, complexity, and occasionally outright unfair practices. That’s why understanding your rights as a consumer isn’t just nice to have – it’s essential.
At Join the Claim, we passionately believe your financial well-being shouldn’t hinge on fine print or hidden clauses. In this guide, we unpack the consumer protections that exist in the UK financial services sector, so you can take control of your financial journey. Whether you’ve faced dodgy sales tactics, unclear fees, or even outright mis-selling, this guide will help you know when – and how – to push back.
Key consumer rights in financial services
Here are some of the basic consumer rights you’re entitled to when dealing with banks, insurers, and other financial service providers:
1. The right to clear information
Financial products can be complicated, but the information provided to you shouldn’t be. Under UK law, you have the right to clear, jargon-free explanations of what you’re signing up for. This includes:
- Transparent details about fees, interest rates, and risks
- Key facts about repayment terms or cancellation options
- Disclosure of any potential conflicts of interest.
If the terms aren’t clear, or if something seems buried in small print, it’s a red flag.
2. The right to fair treatment
The Financial Conduct Authority (FCA) sets high standards for how financial institutions treat their customers. Whether you’re applying for a loan, claiming on your insurance, or investing your savings, you have the right to be treated fairly. That means no unfair contract terms, discrimination, or pressure tactics.
3. The right to effective complaint handling
When things go wrong, you don’t have to suffer in silence. Financial service providers are legally required to have a complaints process in place, and they must handle your grievance promptly and fairly. If you’re dissatisfied with their response, you can escalate your complaint to the relevant body – for instance, the Financial Ombudsman Service or the Pensions Ombudsman.
4. The right to compensation
You may be entitled to compensation if you’ve suffered financial loss due to mis-selling, misconduct, or negligence. This could include recovering fees or damages caused by bad advice, hidden charges, or unsuitable products. There are a few ways to seek compensation for a financial services breach in the UK, including via:
- The Financial Ombudsman Service (FOS): Handles complaints against financial businesses that are still operating. The FOS can investigate your complaint and, if successful, award compensation or other remedies.
- The Financial Services Compensation Scheme (FSCS): Steps in if your financial provider is no longer in business. The FSCS can compensate you for losses related to protected financial products or services, such as savings, insurance, or investments.
- A legal claim: If your case involves significant financial loss or misconduct, or if multiple people are affected, you may wish to pursue legal action against the financial institution.
While the FOS and the FSCS provide accessible routes to resolving disputes and recovering losses, there are benefits to pursuing a legal claim. For example, lawyers specialising in financial claims know how to calculate the full extent of your losses and ensure every aspect of your claim is accounted for, maximising your compensation. Also, when you appoint a lawyer, they handle the heavy lifting – gathering evidence, interpreting contracts, and navigating legal complexities – so you don’t have to. They take the hassle out of the process, ensuring your case is presented clearly and effectively.
More on legal claims later.
Common consumer issues in financial services
Now you know your rights, let’s cut through the noise and focus on the most common problems consumers face when dealing with financial services:
1. Hidden fees and charges
Ever signed up for a service only to be hit with sneaky fees later? Hidden charges are a top consumer complaint. These fees often lurk in credit agreements, insurance policies, or investment products and can add up quickly.
2. Mis-sold products
Mis-selling can happen when you’re sold a product that’s unsuitable for your needs, often because you weren’t given full information or were misled about the benefits and risks. High-profile scandals like PPI (Payment Protection Insurance), Irish mortgage mis-selling, and SIPP pensions mis-selling have shown how widespread this issue can be.
3. Unfair contract terms
Contracts that heavily favour the financial institution over you? That’s a no-go. Unfair terms – like excessive penalties for late payments or vague cancellation policies – are common pitfalls to watch out for.
4. Lack of transparency
Financial services thrive on trust, and transparency is key to building that confidence. But when companies obscure vital details, like risks associated with an investment or exclusions in an insurance policy, it leaves consumers vulnerable to financial harm.
What to do if your rights are violated
You’ve identified a problem. Now what? Here’s a step-by-step guide to standing up for your rights:
Gather evidence
Keep a record of all communications, documents, and receipts related to the issue. This might include contracts, statements, emails, and phone call logs.
Contact the financial service provider
Raise your concerns directly with the company or advisor. Most financial institutions are obligated to respond to complaints within eight weeks. Be clear, concise, and firm about what went wrong and what you expect as a resolution.
Escalate to the Ombudsman
If the provider’s response doesn’t satisfy you, escalate your complaint to the relevant Ombudsman service. The Ombudsman acts as an impartial arbiter and can investigate your case at no cost to you.
Seek independent advice
You don’t have to go it alone. Organisations like Citizens Advice or financial rights groups can provide guidance. If your case involves significant losses or widespread misconduct, consider consulting a solicitor.
Consider group litigation
When a financial issue affects large groups of people – think mass mis-selling scandals or systemic misconduct – joining a group litigation action might be the most effective way to seek justice and compensation.
What’s more, where there is evidence of widespread misconduct, lawsuits can encourage better practices across the industry. Successful claims can push companies to improve transparency and fairness, benefiting all consumers.
How group litigation can protect consumers in financial services
Group litigation is a game-changer when it comes to holding financial giants accountable. By joining forces with others who’ve faced the same problem, you can:
- Amplify your voice: A collective action has more weight than a single complaint, forcing institutions to take notice.
- Share costs: Group litigation spreads legal costs across all claimants, making it a more affordable option. Even better, many group cases are run on a no-win, no-fee basis.
- Recover compensation: Whether it’s refunding fees, recouping losses, or claiming damages, group litigation can help you get what you’re owed.
- Push for systemic change: Beyond individual compensation, group claims often lead to stricter regulations and better practices across the industry.
High-profile cases, like those involving PPI mis-selling or pension transfers, show how effective group actions can be in achieving accountability and fair compensation for consumers.
Breached consumer rights financial services: find a group action!
The financial services sector isn’t always easy to navigate, but knowing your rights puts the power back in your hands. If you’ve experienced hidden fees, mis-sold products, or unfair practices, it’s time to push back. When individual action isn’t enough, joining a group claim can help you recover what you’re owed and hold financial institutions accountable.
Ready to take action?
Don’t wait. Explore active group claims now at Join the Claim to see if you’re eligible. Justice isn’t just for the few – it’s for everyone. Take the first step today.
