Maple Financial have been dealing with Mis-Sold financial products for years, including Mis-Sold swaps. The latest mis-selling scandal in the banking industry emerged on Friday morning as four of the biggest banks in the UK admitted to mis-selling ‘SWAP’ securities. This time, the financial products and questions were interest rate swaps sold to small and medium-sized businesses.

Mis-Sold Swap Claims

Last week the Financial Services Authority (FSA) made a statement, sayiing that they had uncovered ‘a range of poor sales practices’ including an inadequate disclosure of exit costs and failure to ascertain the customers understanding of risk.

Typical Mis-Sold Swap Complaints :

The business did not understand the actual product that was being sold to them. In most cases the business did not understand that this was a seperate hedging product seperate from the loan and did not appreciate that the lending margin was an addittional extra to the hedge rate.

The Business was not explained what would happen if the interest rates fell. Charts used by banks in the sales process did not show interest rates below 3.5%, when we now have interest rates at 0.5%. This created the ‘impression’ that interest rates could never fall below this level.

Businesses were not aware of the size of the break cost. If a hedging product is broken before the term of the financial product then there are substantial break costs to be payed. This goes back to the point that businesses were not fully explained that this was in fact a seperate hedging product and part of the derivatives market.

The Business was not made aware that the Bank could terminate the hedging product. Hedging is designed to favor the Bank because if the swap begins to work against the Bank in the case that the interest rate is rising, a Bank can simply terminate the swap.

The Banks sold swaps as a win win product.

If interest rates fell, the customer would pay and if the interest rate went up, a Bank could terminate the swap.

Read the Swap Mis-Selling story.

Interest Rate SWAP Claims News

Interest Rate Swaps: Barclays Bank, Fair and Reasonable Redress

Certain interest rate hedging products (IRHPs) have come under question by current banking customers and by several banking agencies within the U.K. These banking products are structured collar financial products that are frequently used to hedge against future interest rate expenses. These complex structured collars were sold to numerous loan customers during the period of time before the great international recession. This financial downturn across the international financial markets created unusual interest rate returns for many of the structured collars sold to Barclays Bank customers.

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Preparing your Business for an Interest Rate Swap Claim

The interest rate swap mis-selling fiasco has garnered a lot of attention during the past year. Over 12 months after the first cases went up for review, the claimants are just now receiving the compensation they deserve. Although it may seem like businesses around the country are now experiencing financial windfalls, there is much work that needs to be done before anyone can expect to receive compensation from their interest rate swap mis-selling claims. It has become quite clear that the process is much more involved than a PP mark-II.

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Interest Rate Swaps: Natwest, Fair & Reasonable Redress

Natwest Bank in London has begun a direct redress program for those small businesses affected by several interest rate swap products. These interest rate swap products or structured collars were sold to small businesses as a hedge against any risk associated with the interest rate markets. The small businesses or unsophisticated businesses were allowed to purchase these products. The 2008 financial crisis caused many of these hedging products to be of little value against interest rate changes. Small businesses were left with a financial bill that was significantly burdensome.

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Business Compensation Claims and a whole lot More

In what can only be seen as a blow to big banks and a benefit to small business owners, the Financial; Services Authority confirmed that many of the large banks in England will be required to repay small businesses compensation for mis-selling insurance products to them with their loans.

Known as Interest Rate Swap Arrangements (IRSA’s), these complicated insurance products were sold as a way for small business owners to avoid increasing interest rates on their loan products. In many cases, purchasing one of these products was required to obtain a loan.

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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.