Banks to miss May deadline for interest rate swaps

Published: 19/05/2014

Lenders look set to miss the May deadline imposed by the Financial Conduct Authority to deal with claims of interest rate swaps mis selling.

The four major banks caught up in the interest rate swaps mis selling scandal were meant to have contacted all businesses sold a swap product by the end of May. However it now appears they will once again fail their customers with the FCA expecting the remaining cases will ‘receive details in the coming six weeks’.

There are also fears the quality of RBS’s review process could be ‘compromised’ as the lender attempts to ‘catch up’.

Simon Cottrell, Senior Partner at Goldsmith Williams, comments:

“I think it speaks for itself when I say I am by no means surprised that lenders will fall short of this ‘imposed’ deadline. I also expect them to do so without any repercussions.

“The news has once again been carefully concealed by the headline of the amount of redress repaid to date; £800million is by no means an insignificant amount but it is a mere drop in the ocean when you consider what has been lost by businesses.

“I am particularly concerned by the side note relating to the risk of RBS cases being ‘compromised’ as the lender-turns-hare and speeds its way through the race only to fall at the final hurdle. While I want businesses to receive the redress they deserve as quickly as possible, quantity must not replace quality. If it does then we will just see yet another scandal hit businesses further.

“Businesses must protect themselves throughout the review. If I’ve said it once, I’ve said it a hundred times – the FCA Review Scheme does NOT guarantee redress – and in light of this latest revelation, that businesses could fall victim to a lax and careless review, it is even more imperative to have independent legal advice.”

Content correct at time of publicaion