misselling

Misselling is the practice of selling a product or service to a customer through misleading, deceptive, or inappropriate conduct, or by failing to consider the buyer’s needs and circumstances. It occurs when sellers misrepresent features, benefits, risks, or costs, or when they push a product that is unsuitable or unnecessary, often using pressure, selective disclosure, or bundling.

Misselling is addressed under consumer protection laws and industry regulations in many jurisdictions. Common indicators include overstating benefits, downplaying risks, omitting fees, failing to explain alternatives, or tailoring pitches to customers unlikely to benefit. It can occur across sectors, but is particularly associated with financial services, insurance, and consumer credit.

In financial services, high-profile cases have involved the mis-selling of products such as payment protection insurance (PPI) in the United Kingdom, as well as unsuitable mortgages or investments. Similar patterns appear in other sectors where sales incentives, product complexity, or improper disclosure influence customer decisions.

Regulatory responses typically aim to deter mis-selling, require redress for affected customers, and impose penalties on offending firms. Remedies may include refunds, compensation schemes, and changes to sales practices. Regulators may also implement conduct rules, disclosures, and training requirements to prevent recurrence.

Impact and policy implications include reputational damage to implicated firms, increased compliance costs, and greater emphasis on evidence-based suitability assessments, clearer product disclosures, and ongoing monitoring of sales practices. Misselling is generally regarded as an unfair or deceptive business practice, with ongoing efforts to strengthen protections for consumers.