Nisha was sold an investment product that performed badly but the investment company charged her a fee for taking her money out.
What happened
Nisha, a low-risk investor, went to a financial business to invest. She wanted a product that wasn’t likely to drop much in value and didn’t require her to pay to access it at short notice.
The company offered Nisha a savings plan with the lowest-risk funds it had available. However, the product still involved taking some risk and it also had a tie-in period. A tie-in period means you must stick with the investment for a minimum time, which is typically between four and 12 weeks. If you end it early, you may have to pay a fee.
Nisha agreed to invest, but a few months later the fund was performing poorly, and she began to worry. She complained to the business, saying it shouldn’t have sold her the product as it was too risky for her.
But the company sent her a final response letter saying it had done nothing wrong and reminding her that she’d have to pay a fee if she broke the tie-in period. Feeling stressed, she came to us.
What we said
When Nisha complained to us about her investment, we checked her circumstances. We found that she didn’t have the capacity to take much financial risk and only had a small amount of rainy day money put aside.
She might have been better off putting the money into a bank account that paid a reasonable rate of interest. However, this didn’t seem to be part of the business’ product range.
The business considered Nisha a low-risk investor. Yet we found that she had no choice but to accept some risk when she invested with it. We concluded that this product was mis-sold to Nisha and asked the company to repay her.