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Watchdog&#39s tough line on bonds

The Financial Ombudsman Service says it now expects to receive 3,500 complaints next year from disgruntled investors who have lost cash through investing in index-linked income bonds.

The FOS has budgeted for 1,000 more complaints than it expects to receive this year after being surprised by the numbers of investors who claim to have been led to believe that the bonds were lower risk than they actually were.

The FOS believes that investors&#39 real attitude to risk often differs from their perceived attitude to risk judged by the company or adviser selling the product. As a result, it says it will take a “more forensic” approach to dealing with complaints. It will not necessarily dismiss misselling claims even where there is clear evidence – often from a fact-find completed by a firm at the time of sale – that the investor was prepared to accept a medium to high level of risk.

Spokeswoman Alison Hoyland says: “There may be other evidence that contradicts the fact-find, such as what they were told, even other types of business they have done in the past. Things may correlate but we may still look into the case.”

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