Clients left with no right of appeal
The Financial Conduct Services (FCA) redress scheme may appear to be a saving grace for businesses mis sold an interest rate swap but, as many clients are finding out too late, the scheme is not as straightforward as they originally perceived.
Under the scheme, lenders have been ordered to write to potentially affected small and medium-sized enterprises (SMEs). Business owners are then invited to attend a fact find meeting with the independent reviewer.
“This all sounds very nice and friendly, doesn’t it. However this situation is not the olive branch it appears,” warns Simon Cottrell, Senior Partner at Goldsmith Williams.
“For a start the independent reviewer has been appointed by the lender so while the title may imply impartiality the sceptics remain unconvinced. And, given some of the meeting our commercial litigation team have experienced with clients, cynicism would appear to win out!
“In our experience these seemingly friendly fact find meetings have, at times, been nothing less than an interrogation with every answer taken down and scrutinised. Whilst our clients have been fortunate to have specialist legal representation and were therefore well protected, we have received a number of enquiries from businesses who attended the meeting alone and unwittingly damaged their chance of receiving redress.
“Sadly at this point of time there is little we can do to help these businesses as, after the review, they are left with no right to appeal. This is why many specialists remain unconvinced by the FCA review as businesses are once again being duped by the banks.”
Content correct at time of publication