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Misselling is the deliberate, reckless, or negligent sale of products or services in circumstances where the contract is either misrepresented, or the product or service is unsuitable for the customer's needs. For example, selling life insurance to someone who has no dependents is regarded as misselling. There is no legal definition of "misselling" in the U.K.[1]


Various common types of misselling may occur. More recently, banks have been at the center of misselling with products such as ISAs and investments.[2][3]

Material misrepresentation[edit]

This may include misrepresentation of the commercial situation.[4]


The sale of unsuitable products, such as invalid insurance, is misselling, and has led to substantial compensation orders.[5]

Financial misselling[edit]

Financial misselling refers to deliberate false statement made by individual, usually a financial organization representative to sell off their financial products or services usually not profound to the customer. For example, HomeServe an emergency home repair insurance company based in United Kingdom was fined for £30m for misselling to its customers by Financial Conduct Authority in February, 2014 as they failed to explain actual price and its coverage of their financial products.[6][7] According to a news in The Telegraph, Britain's financial services industry has PPI (payment protection insurance, (sold with credit cards) claims worth around £13bn from 2008 to early 2014.[8] Another on going misselling scandal relates to interest rate swaps sold to small and medium enterprises by UK banks.[9][10]


  1. ^ "Misselling Definition". Investopedia. Retrieved 2012-03-23.
  2. ^ "Investment Mis-selling: The Facts". goodwinbarrett.co.uk. 2016-01-20. Retrieved 2016-01-20.
  3. ^ "ISA Helpline - Banks not giving proper ISA advice". isahelpline.co.uk. 2013-03-27. Retrieved 2013-03-27.
  4. ^ "Fed up with doorstep cold callers? | Which? Conversation". Conversation.which.co.uk. 2011-05-19. Retrieved 2012-03-23.
  5. ^ "BBC News - Santander profits hit by PPI mis-selling costs". Bbc.co.uk. 2011-07-27. Retrieved 2012-03-23.
  6. ^ Hilary Osborne (13 February 2014). "HomeServe fined £30.6m for poor complaints handling and mis-selling". Theguardian.com. Retrieved 3 March 2014.
  7. ^ Nicole Blackmore (13 Feb 2014). "HomeServe fined £30m for mis-selling to 70,000 customers". Telegraph.co.uk. Retrieved 3 March 2014.
  8. ^ Szu Ping Chan (22 Feb 2014). "PPI mis-selling claims 'have yet to peak'". Telegraph.co.uk. Retrieved 3 March 2014.
  9. ^ "Interest rate hedging products (IRHP)". FCA. 18 February 2016.
  10. ^ [1]