The causes of financial mis-selling are :
- Customers are not made aware of the risk involved in the
product or service that they are selling.
- The sales representative are not hired after a proper
background check and they carry out sales by misleading the
customers.
- The system of a commission based system of carrying out sales
is followed.Higher commissions are offered for higher sales carried
out.
- The individual carrying out mis-selling keeps his personal
interest above others.
- Due to lack of transparency, mis-selling is carried out.
- They try and confuse the customers and confused and misinformed
customers , end up making poor choices of purchases.
- A financial advisor may take advantage f his superior financial
knowledge in misleading customers.