Professional negligence solicitors in Australia deal with mis-sold financial products including bonds, investments, endowments, mortgages and payment protection insurance (PPI). Professional negligence solicitors also deal with civil claims for recompense as a result of mortgage fraud and compensation claims for professional negligence against independent financial advisors. Claims are usually risk free by use of the no win no fee scheme and if you do not receive compensation then you will not be charged legal fees. If you would like free advice without obligation, just call a professional negligence solicitor will usually give free initial advice without any further obligation.
Guaranteed Income Bonds
Guaranteed Income Bonds are sold under a variety of names and some have been dubbed as Precipice Bonds (because value can fall off a cliff) with a promise of guaranteed income no matter what the performance of the stock market to which their value is inevitably linked. Whilst income is guaranteed, capital value is not which means that at the end of the term the value of the bonds may be negligible. If you were mis-sold this type of bond because of a lack of detailed information from a financial advisor who did not establish you attitude to risk, you may be able to sue the seller or the seller’s agent in a court of law to recover your losses.
Endowment mortgages have been a cause for concern for a long time because of stock market fluctuations to which their value is tied. The principle is that the buyer of a property pays interest only for the term of the mortgage and pays off the capital sum using the proceeds from a matured endowment policy. Unfortunately, most endowment policies have failed to achieve their anticipated value as the premiums paid by the purchaser of the property were invested in the stock market which was in decline for a considerable period and has failed to achieve anticipated returns. At the end of the term there may be a shortfall which may be claimable as a result of mis-selling which is generally caused by the seller failing to obtain sufficient information about the buyer and failing to fully explain how an endowment policy operates.
A straight repayment mortgage may have been mis-sold if the seller of the mortgage didn’t impart full information to the buyer of the property before the mortgage agreement was signed. Incidences of mortgage mis-selling usually come to light after foreclosure following default on the installments by the buyer of the property concerned. The seller of the mortgage should impart full details to the buyer including the effect of default on instalments, penalties and charges for early repayment and should discuss the effects of retirement and in addition should carry out a full fact find before recommending any particular mortgage. Most mortgage mis-selling relates to a lack of communication and failure to obtain full personal details and impart accurate information by the seller of the mortgage to the buyer of the property.
Most people know that financial investments can go down as well as up however that does not remove the responsibility from financial advisors who recommend investments to impart full information about any proposed investment to their client to allow them to make an informed decision. A financial advisor is expected to offer the client a number of alternatives after having carried out a detailed fact find which must establish the client’s needs and wants including their attitude to risk. Investment that is recommended without a detailed fact find may well have been mis-sold.
Payment Protection Insurance PPI
The problem with payment protection insurance is that it is expensive and rarely pays out. PPI which is often applied to credit cards and loans is highly lucrative for the seller who, on average, makes a 70% profit margin due mainly to mis-selling. 7 out of 10 claims are rejected and in many cases the PPI was sold to those who could never, under any circumstances, claim such as the self-employed. If you were told that you had to have PPI attached to a loan or if it was applied clandestinely without any details being given or was applied with your consent but without a full explanation, then you have been mis-sold PPI. It is up to the seller to provide full information to the buyer failing which the PPI has been mis-sold. In many cases the lender simply gives a global repayment figure, the monthly instalment for which includes PPI, that the borrower knows nothing about, which means that the PPI has been mis-sold and is reclaimable.
Mortgage fraud varies however it usually depends on dishonest professionals who may include estate agents, solicitors, valuers and surveyors. The usual scenario is for an overpriced property to be sold to an unsuspecting buyer who relies on a fraudulent overvaluation to obtain a loan or a mortgage to facilitate the purchase of the property. The fraud remains undiscovered until the buyer tries to sell and has the property valued. The shortfall is carried by the original buyer who may default and leave the lender, most often a bank or building society exposed. Most mortgage frauds are carried out through a limited company however it is possible to make the directors personally liable if they were party to the fraud and whilst the company may be insolvent the directors often are not.
Negligent Financial Advisor
Independent financial advisors or consultants or agents hold themselves out as experts and may be liable in negligence for a failed investment. Whilst even good advice can result in losses, a financial adviser owes a duty to clients to offer advice that is fair and reasonable and compares to other advice given by similarly qualified experts. If the agent fails in that respect it may be a case of professional negligence justifying a compensation claim being pursued in a court of law.