Interest rate swaps pay outs finally gain some momentum
Businesses who have been mis sold an interest rate swap are finally starting to receive compensation from lenders.
According to official figures from the Financial Conduct Authority (FCA) the total amount of redress payouts reached £306.3m as of the end of last month. This is vast improvement on where we were two months ago when banks had paid out just £81m.
But this is still barely touching the surface of the scandal of which lenders have set aside provisions of approximately £3billion. It also does not account for any consequential losses businesses may have incurred as a result of the swap being mis sold.
Consequential losses include loss of profit and/or interest, bank charges, litigation fees and any missed opportunities for the business such as expansion. These are understandably much more difficult to calculate than the original cost of the swap. As a result businesses are now required to submit an initial claim for the cost of taking out the swap and then make a second claim for the reimbursement of any consequential losses.
Simon Cottrell, Senior Partner at Goldsmith Williams Solicitors urges businesses to see all claims through to the end:
“We appreciate some businesses will feel somewhat appeased by receiving the 8 per cent interest on top of their redress for the cost of an interest rate swap. However for many this sum will fall woefully short of the actual losses they have suffered.
“I’m sure the last thing many businesses will want is another battle with their bank to recover consequential losses, particularly given the complexity around these costs. However our team of swaps lawyers can take on this challenge on your behalf even if you have pursued an original claim independently through the FCA review scheme, ensuring you recover the true extent of the cost of your mis sold interest rate swaps.”
Content correct at time of publication