Reclaiming for mis sold swaps getting easier?
There appears to be some light at the end of the tunnel for businesses mis sold an interest rate swap as banks finally show signs of common sense and compassion, albeit some more than others.
Banks have now agreed to ‘fast track’ redress for affected businesses by splitting the repayment process into two-stages. The first will see businesses receive compensation for the cost of taking out the swap while the second stage will reimburse for any consequential losses such as loss of business or legal fees.
Consequential losses are largely blamed for the current delays faced by affected businesses because of their complexity. However the new process will allow many businesses to recover some form of redress at the earlier opportunity.
While the majority of lenders have agreed to the new process, Barclays and Lloyds Banking Group will only do so on a case-by-case basis and for customers they deem to be in ‘financial distress’, something senior partner at Goldsmith Williams, Simon Cottrell, is particularly disappointed with:
“While it is pleasing for banks to finally put the need of their customers first, we are incredibly frustrated that the latest scheme appears to be on an opt-in basis. For us this once again raises questions surrounding the authority and allegiance of the FCA.
“The move has undoubtedly come about following the outrage at the heartbreaking reality demonstrated in the recent Panorama’s documentary. Many were left flabbergasted at the impact interest rate swap mis selling has had on businesses. Sadly the programme only reiterated what we as a firm already know – that innocent business owners are being pushed to the brink.
“The programme has however only heightened our determination to help as many affected businesses as possible. We do this by offering a free assessment with one of our experienced commercial litigators before presenting your case to the lender and independent reviewer.
“We have been very clear about the need for businesses to seek independent legal representation when claiming for mis sold interest rate swaps and this latest scheme does not alter our stance. While it may appear that interest rate swap claims are getting easier, businesses remain at risk of not recovering the true cost of the swap particularly in regards to consequential losses.
“There have been claims from within the industry that businesses are being discouraged by the FCA from putting in claims for consequential losses. In a statement by the regulator they clearly highlight this intention when they say:
‘[Customers will] typically be offered 8 per cent simple interest on top of their redress payments. We hope this means many customers can avoid having to put together consequential loss claims which are likely to take longer to assess.’
“We therefore can’t help but wonder if this latest scheme is just the FCA’s latest attempt to help out the banks and deter businesses from pursuing a claim for consequential losses altogether?!”
Content correct at time of publication