In the news this morning Barclays has announced that it is increasing its Mis Selling fund to £1bn to include Swap Claims. Last week the FSA decided after an ivestigation into Interest Rate Swaps, that over 90% of the Interest rate Swap policies that they looked at, had been mi sold.
Although there were an estimated 40,000 mis sold Interest Rate Swap products sold, these were sold to small businesses and the total amount of compensation to be potentially claimed, may exceed the PPI claims repayed.
Barclays increases mis-selling provisions
Barclays has increased the provisions to cover two mis-selling scandals by another £1bn.
It relates to the mis-selling of interest rate hedging products sold to small and medium-sized firms, and payment protection insurance schemes.
Following a pilot review, the bank said provisions for the scandal involving interest rate swaps are now £850m, and £2.6bn for the PPI schemes.
The bank is expected to release full-year results on 12 February.
The Financial Services Authority (FSA) last week ordered the UK’s major banks – Barclays, Royal Bank of Scotland, Lloyds, and HSBC – to review all their sales of interest rate hedging products, and provide redress where mis-selling has occurred.
The FSA said that around 40,000 interest rate hedging products were sold since December 2001 to “non-sophisticated” customers, to protect against interest rate rises or limit interest rate fluctuations.
In its pilot review of 173 such sales across the four banks, the FSA said it found that more than 90% did not comply with one or more of its regulatory requirements.
Barclays’ latest provisions announcement comes just a week before the bank’s new chief executive Antony Jenkins is expected to unveil a blueprint for overhauling the bank’s culture.
Its finance director Chris Lucas announced over the weekend that he was stepping down.
The bank has already been slapped with a record £290m fine by UK and US regulators related to a separate Libor-rigging scandal.
BBC article: http://www.bbc.co.uk/news/business-21334145
Maple Financial Swap Claims Service
We have a specialist team of solicitors dedicated to dealing with the mis-selling of interest rate protection products by the banks. We are very happy to review these relatively complex arrangements and to claim compensation for our clients where appropriate. Please do not hesitate to call and we will be happy to discuss your individual concerns and requirements.
Justifed Claims for Interest Rate Swaps – Interest Rate Protection Arrangement Claims
- discrepancies between the underlying value of the loan and the interest rate swap, with customers being sold swaps which far exceed the term of their underlying borrowing, or where the notional amount of the swap is far in excess of the actual borrowing.
- substantial discrepancy between the length of the loan facility and the length of the swap product.
- customers being forced to continue with the interest rate hedges in order to maintain their current lending facility upon renewal.
- banks failing to explain to their customers the extent of the exit or breakage costs of the swaps and failing to ensure that the derivative products offered meet the needs of the customers.
- breaches by the banks of their duty of care to customers coupled with negligent misrepresentations by the banks as to the nature or effect of the products sold.
- failure by the banks to comply with their regulatory obligations under the FSA Conduct of Business.
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.
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.
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.
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
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
Latest posts by Tim Capper (see all)
- PPI Claims Currently Show No Sign of Slowing Down - December 10, 2014
- Swaps (IRHP) Determining the Level of Redress - November 3, 2014
- FCA updates PPI redress for 2.5 million old PPI complaints - October 27, 2014