Calls to extend interest rate swaps redress scheme
MPs are urging the Financial Conduct Authority (FCA) to extend its existing redress scheme for mis sold interest rate swaps to include those who were mis sold an embedded swap.
At present the FCA redress scheme is only available to businesses who took out an interest rate swap as an independent product and not those who had it embedded in a business loan. This is because embedded swaps are classified as commercial loans and therefore are not regulated.
Liberal Democrat, John Thurso, is one of 18 MPs who has signed an early day motion calling for a review into the sales practice of these products:
“The exclusion of embedded swaps from the redress scheme is something I have spoken to FCA chief executive Martin Wheatley about and there is no dispute between myself and the FCA.
“The FCA has very helpfully pointed out to me that it is not, in its view, legally empowered to undertake a review on these products.
“This is a cry for help from the FCA. It is over to us in parliament to make sure we either give the FCA the power to do it or instruct someone else to do it who can act in a similar vein.”
“We want to make sure that going forward unscrupulous banks do not embed everything in order to escape regulation, which is a clear danger.”
Senior partner, Simon Cottrell whose firm specialises in helping businesses affected by interest rate swaps mis selling, is in agreement:
“We are fully behind these calls to allow businesses mis sold embedded interest rate swaps to claim redress. They, like all affected businesses, have been let down by their lender and deserve to be compensated.
“It is a similar case with Tailored Business Loans which too have not been included in the original redress scheme.
“However businesses who have or have had a tailored business loan could still recover redress with our help. We are already helping businesses with these loans either recover any break costs they have paid or help them escape the loan without incurring such charges.”
Content correct at time of publication