FSA tackle Interest Rate Swap Mis-selling to SME customers by “Big Four”
You may have been sold an Interest Rate Swap product (such as straight swap, collar or cap) or have a major loan tacked against the LIBOR interest rate. If so you may be entitled to compensation under a scheme proposed by the FSA last week. The FSA has published the initial findings of their review on Interest Rate Swaps in which the banks are heavily criticised for their sales practices and have agreed to enter into a swaps product complaints handling process. In particular the FSA has picked up on the lack of advice on the risks of the Bank of England’s rate dropping for a sustained period of time, poor or non-existent disclosure of product exit fees, unnecessary over-hedging of negligible risk, lack of analysis of an individual/company’s needs and poor record keeping. A copy of the FSA’s findings can be seen here.
If you have been sold such a product you can expect to be contacted by your bank very soon regarding a review of the products they sold you. The FSA has said that for non-sophisticated customers the review may result in product cancellation or change of terms of the product or even a refund in the worst cases of mis-selling. Despite all this the case of Pearson v Barclays is now gathering pace in the courts and every indication is that Barclays will attempt to defend much of Ms Pearson’s claim that she was mis-sold a complex interest rate swap product. The stakes are high for the banks as this case may set a precedent by which SME customers may be in line for compensation on a scale not seen since the Payment Protection Insurance mis-selling scandal of recent years.
Your chances of receiving the best outcome under a bank’s review will be enhanced by having legal advice and representation at an early stage. The Dispute Resolution department at Royds LLP currently acts for clients who have been mis-sold interest rate swap products by major banks and has the proven expertise in banking litigation law to obtain the best possible result for you.