Midweek Money: When fools rush in

There's still hope if you've made a bad investment.
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DESPITE THE fact that the Financial Services Act was passed in 1986, hundreds of people each year are sold inappropriate investments or given advice that is not suitable to their situation. If this happens to you, where should you go for advice?

The Personal Investment Authority (PIA) Ombudsman Bureau resolves disputes between customers and the providers of investment products regulated by the PIA - independent financial advisers, building societies and banks.

Its principal ombudsman is Anthony Holland, a solicitor. The bureau's budget is made up of a contribution from the PIA's regulatory fees and by a flat fee of pounds 500 per case, to be paid by the firm about whom a complaint is made.

Before the PIA will look at a complaint, the matter must first have been referred to the firm concerned. The firm will acknowledge the complaint within seven working days and should complete its investigation within two months. The firm will then send a letter rejecting or accepting the complaint. If the latter, it will state the settlement being offered.

Should the outcome not be satisfactory, it is then that the complainant should contact the bureau. However, it cannot investigate:

l The terms of mortgages and other loans, unless connected with an investment;

l Bank and building society deposits;

l A mere fluctuation in the value of an investment.

Although the complainant has no right of appeal, legal redress can be sought through the courts. An aggrieved firm can apply to the court for a judicial review if it is able to show that the ombudsman's decision was unfair, or was against the evidence, or was wrong in law. Such reviews, however, are rare.

The amount for which the ombudsman can make a binding award is limited to pounds 100,000, or pounds 20,000 per annum for permanent health insurance. However, this does not mean that the recommended award cannot be higher. The highest award ever made was pounds 400,000.

The PIA Ombudsman Bureau may be contacted at: Hertsmere House, Hertsmere Road, London E14 41B (0171 216 0016)