The Financial Conduct Authority (“FCA”) review into the way that some banks sold interest rate hedging products (such as SWAPS, CAPS or COLLARS) has resulted in £1.8 billion being paid in redress. Commercial litigator Andrew Carter explains.
Which banks are involved?
Under the review, which started in May 2013, the nine banks involved (Allied Irish Bank (UK), Bank of Ireland, Barclays, Clydesdale & Yorkshire Banks, Co-operative Bank, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Santander UK) had to examine their records to identify the businesses that met the FCA’s qualifying criteria, and then write to them to invite them to participate in the review. Of the 18,000 customers identified, 16,000 chose to join the review, and 2,000 have chosen not to participate. All claims have now been determined and offers of basic redress made where appropriate.
For some reason, however, businesses that had bought an interest rate CAP had also to proactively complain to the bank in order for these sales to be included in the FCA review. Unsurprisingly the FCA says that so far, only 1,000 out of 7,000 businesses have complained to their bank about having been sold a CAP.
Importantly, for eligible businesses that had bought CAP products, a deadline of 31 March 2015 has now been set by which these complaints are to be made. We therefore urge those affected to take action as soon as possible and in any event before the 31 March 2015 deadline.
Whilst customers can still complain through their banks’ usual complaints handling processes, refer their complaint to the Financial Ombudsman Service, or pursue their case through the courts after the 31 March 2015 deadline, affected businesses should utilise the FCA review because the bank is obliged to pay compensation if there is evidence of mis-selling.
For more information
For more information on the FCA review process or to discuss your eligibility to claim compensation under these provisions, please do not hesitate to contact Andrew Carter in Milton Keynes on 01908 202150. Alternatively, please download our glossary of key terms related to the mis-selling of interest rate hedging fund products.
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