Home News Payouts begin for business SWAP mis-selling

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Small businesses mis-sold complicated insurance products by their banks have begun to receive compensation according to the Financial Conduct Authority (FCA) which has published its first update on banks’ reviews of sales of Interest Rate Hedging Products (IRHPs).

By the end of August, 10 offers of redress had been accepted by businesses, totalling £500,000. The FCA expects this figure to increase rapidly over the coming months – 210 offers have already been sent to customers with a further 1,700 offers due to go out shortly.

Since the beginning of the full review in May 2013, and with over 30,000 cases to review, the banks involved have taken on 2,800 staff to work through claims and have so far reviewed in excess of five million documents. More than 25,000 sales (85% of the total number of sales) are in the process of being assessed and the first letters offering compensation have been sent out.

Martin Wheatley, chief executive of the FCA said: “With 85 per cent of cases now under review, banks have made progress. But like the thousands of affected small businesses, we want to see redress paid quickly to those who have suffered loss as the result of mis-selling.”

In light of this progress, the FCA expects that most customers will be informed of the result of their review, and of any possible basic redress, by the end of the year. Due to their complicated nature, redress offers to customers making a claim for certain consequential losses, may take longer.