BBC Panaroma has recently learned about a costly swap scandal. Banks who mis-sold these Interest Rate Swap products could be fined by a regulator. These complex loan products were designed to give borrowers more security by protecting them against rising interest rates. However, since the interest rates are at all-time low, many businesses have noticed that their payments have increased drastically.

The Financial Conduct Authority, which is also known as The FCA, has set up a re-dress scheme. Over 30,000 cases will be reviewed. Unfortunately, only 32 banks have received a payout. According to the FCA, mis-selling products is now a cultural problem. They have also stated that banks could be fined after the re-dress scheme is closed.

The Interest Rate SWAP Scandal

Catherine and Michael Whelan live in Newport. They are just two of the many people who have been affected negatively by the scandals. Panorama contacted Barclays about the couple’s case. The bank has suspended Catherine and Michael’s interest swap payments. They have also stated that they are working hard to rectify any mistakes that they have made.

Some of the other victims of this recent scandal include property developers, pubs, hotels, retailers and developers in the United Kingdom. Lord Sugar, which is a multimillionaire businessman, has also been a victim of the scandal. It is estimated that 40,000 swaps have been made since 2001. Banks have also set aside about 2.5 billion pounds to compensate customers.

Many of the victims have claimed that the products that they were sold did not properly protect them against rising interest rates. They also stated that they were penalized when the rates had fallen. Other people claim that they were forced to take out contracts that they did not want and end up spending thousands or even millions of pounds in payments. Furthermore, people stated that they were not properly warned about the payments.

According to the regulator’s figures, the payout for these cases can be around 50,000 pounds each. The Royal Bank Of Scotland is one of the most exposed banks in this scandal. It has had more cases than HSBC, Lloyds Banking Group and Barclays.

According to an analysis of this scandal by DTZ, 20 percent of the commercial borrowers could have a valid mis-selling claim. Hans Vresen is a global researcher at DTZ. He has stated that the figures show that there has been a significant mismatch between the loans that were taken out by the borrowers and the swaps that were sold to them. Three billion pounds have already been put aside to cover the mis-selling cases.

Certain businesses knew about the risks that were involved with the swaps. That is why thousands of claims have controversially been excluded from the compensation scheme.


Interest Rate SWAP News

FCA May Fine Banks Involved With Interest Rate Swap Mis-Selling

Banks who sold complex insurance products could possibly be fined by the Financial Conduct Authority. The deals were intended to protect the borrowers from rising interest rates. However, many businesses saw their payments increase drastically with the interest rates at a historic low.

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FCA Interest Rate Swap Flowchart

Derivatives may be one of the most complicated financial investments on the market. The Financial Conduct Authority (FCA) has created a chart to help consumers, barristers and bureaucrats understand whether a potentially mis-sold Interest Rate swap Hedging Product (IRHP) can be reviewed.

The Financial Conduct Authority (FCA) Interest Rate Flow Chart uses a flow diagram with “Yes/No” questions to show whether a debtor qualifies for regulatory review.

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Small Business Disillusioned with mis-sold Interest Rate Swaps

Many businesses have become disillusioned due to the compensation schemes set aside for the interest rate swap mis-selling derivatives. The Financial Services Authority has agreed to look into the cases of the mis-sold financial products of the big four banks (Barclays, Royal Bank of Scotland, Lloyds, and HSBC). There are several other banking institutions that have become involved in this Swap claims dilemma, also.

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Interest Rate SWAP Claims UK

Maple Leaf Financial have a specialist team of solicitors dedicated to dealing with the mis-selling of interest rate swap protection products by the banks. We are happy to review these relatively complex swap arrangements and to claim compensation for our clients where appropriate.

If you believe you have incorrectly been classified as a ‘sophisticated’ customer and have, therefore, not been eligible for interest rate swap redress. Maple Leaf Financial will review your interest rate product and we will be happy to discuss your individual concerns and requirements

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Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim


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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.