Interest Rate Swaps Mis Selling
Many small and medium businesses (SMEs) have been mis sold complex interest rate swap derivatives. It is estimated that 40,000 SMEs could have been a victim of interest rate swaps mis selling, although many within the industry predict the figure, in reality, is closer to 100,000.
The Financial Services Authority (FSA now FCA) has confirmed Barclays, HSBC, Lloyds and RBS must undertake a full review of the sales of interest rate swaps to SMEs.
While undoubtedly a step forward, the announcement fails to provide any clarity on what will now constitute "fair and reasonable" redress nor does it set any timeframes.
So now is not the time to wait. Our professional advice to any SME affected by interest rate swaps mis selling is to seek specialist legal advice immediately in order to recover the full impact of your financial loss.
Sold on the basis of a rising market, these hedging products were designed to protect SMEs from increasing interest rates. However lenders failed to provide a full explanation of the associated risks and therefore could be deemed culpable of mis selling many of these products.
Time is running out through to reclaim financial damages; potentially cases have a six-year deadline to claim. Contact us for legal advice and to arrange an appointment with our qualified solicitors.
Many interest rate swaps were mis sold because:
- Banks did not fully explain the financial implication of the product should interest rates fall
- Clients were not made aware of the substantial exit fees – often 50% of the total loan
- Banks were able to terminate the policy at any time without charge
- Clients were put under undue pressure to take out the policy or given incorrect information about its requirements (i.e. they were told it was a condition of the loan).
However when the LIBOR rigging scandal broke, the true extent of interest rate swap mis selling was revealed; lenders had knowingly sold the product on the pretext of a rising market when they were fully aware that interest rates would soon drop.
Goldsmith Williams is dedicated to helping all SMEs affected by interest rate swap mis selling. As an established law firm, we are well practised in dealing with lenders and securing financial redress through our excellent work in the payment protection insurance mis selling scandal.
We understand the devastating impact interest rate swaps have had, and are still having, on many SMEs. That is why, as well as presenting your complaint to the lender and, if necessary, the Financial Ombudsman Service, we will act to have your fees frozen while your case is under review. Please contact us for more details.
An Introduction to Interest Rate Swaps Mis-Selling
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