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What counts as mis-selling?

The exact circumstances in which your policy could be classed as mis-sold will depend on the type of insurance you bought, and how and where you purchased the policy from. However, there are some common practices that are viewed as mis-selling.

Unsuitable policy

Regardless of the type of insurance, the financial firm that sold you your policy had a duty of care to ensure the cover was suitable for your circumstances.

This means checking you were eligible to claim and making sure you had a genuine need for the cover.

For example:

• Selling you payment protection insurance when you were unemployed could be considered mis-selling because it is likely you would not actually be able to get a payout.

• If you were too old to ever be able to claim on the policy, had medical conditions that prevented you from being legitimately covered or worked in a vocation that made you ineligible you may have been mis-sold.

• If the risks and the consequences of not taking out cover were exaggerated by the financial firm selling you a policy - as with identity theft insurance and credit card protection insurance - you may have been mis-sold.

• Being recommended and sold a home insurance policy that does not cover the area your property is based in would be classed as mis-selling.

Essentially, if the insurance was not suitable for your circumstances when you were sold it then you may have reason to make a claim for compensation.

Pressure selling

Implying that insurance is compulsory when it is not is against the rules because it is effectively conning you into taking out cover.

Despite this, lots of firms mis-sold life insurance with mortgage applications and loan protection insurance policies with unsecured loans; even home contents insurance and critical illness insurance have been mis-sold in this way.

Check paperwork relating to existing financial products (as well as the ones you've held in the past) carefully to see whether they show any extra, unexplained insurance costs for policies you never agreed to. Mortgages, loans and credit cards are generally the main culprits.

Where do I begin?

The process of reclaiming mis-sold insurance costs is the same regardless of the type of cover you have - the first step is to complain to the financial firm that sold you the insurance policy.

You can complain up to 6 years after your insurance policy was sold even if you have finished paying the insurance premiums and no longer have the cover.

You need to write a letter to them clearly stating the reasons why you think your policy was mis-sold and providing any evidence you have to back up your claims. This might include details of how you purchased the policy and what you were told by the staff at the time.

The firm in question will then have up to 8 weeks to evaluate and respond to your complaint.

If you believe you were mis-sold a policy that's more than 6 years old you can still raise a complaint but your rights are not quite the same.

What if the company has gone bust or been sold?

If the company that mis-sold you insurance has been purchased by another firm then the liability will most likely pass over to the parent company and you should complain directly to them.

If you believe you were mis-sold an insurance policy by an FCA regulated business which has now gone into liquidation, you will need to direct your complaint to the FSCS.

The FSCS deal with all complaints regarding mis-selling by regulated companies that are no longer trading and may be able to pay the compensation you are owed if your complaint is upheld.

Refer to the Financial Ombudsman

Although many banks are now accepting liability for mis-sold credit card insurance and mis-sold payment protection insurance it's still likely that your complaint will be rejected on your first attempt. If this does happen, do not get downhearted.

This rejection is simply the green light you need to refer your complaint to the Financial Ombudsman - an independent arbiter with the power to force the banks to pay you your money back.

To get started simply call the Financial Ombudsman on 0800 023 4567 or 0300 123 9 123 and complete their complaint form available on the Financial Ombudsman website.

They will review your complaint and go back to the financial firm in question to ask for proof you were not mis-sold before making a decision on your case.

What could you get back?

If your complaint is accepted by the financial firm or upheld by the Financial Ombudsman you should get the following refunded:

• The cost of all your insurance premiums, for the duration you have held the policy

• Any interest you were charged on the cost of your policy

• An additional 8% interest based upon the total amount you should be paid for the above

What about no win no fee companies?

It's likely you've seen TV adverts and received spam text messages and emails from companies promising to reclaim mis-sold insurance premiums for you without the hassle.

However, most of these companies will take a sizeable share of your compensation in return for their services, meaning you could lose anywhere between 20-50% of the money you're due if you decide to employ them to take on your case.

Fighting for compensation yourself, by following the steps above, is not difficult or time consuming and is the best way to get your money back without sacrificing a big chunk of the cash you are rightfully owed.