What is mis-selling?

Mis-selling means a financial company selling a product without observing the sales principles, for example by not adequately explaining the product's structure or risks or by recommending a product that does not suit the investor's profile.

In one Financial Supervisory Service dispute mediation case, violations of the duty to explain and the suitability principle were recognized and the company was required to compensate part (30%) of the loss. However, the compensation ratio is often determined by also taking into account factors such as the investor's own failure to review the product carefully.