SMEs can’t afford to sit back and wait

Published: 01/05/2013

Small and medium businesses mis sold an interest rate swap are being urged to be proactive in order to secure financial redress.

There is concern from specialist law firms that affected businesses are under the misconception that, following the Financial Services Authority’s (FSA now FCA) pilot scheme, their lender will automatically provide redress for mis sold interest rate swaps.

The FSA pilot scheme revealed over 90% of the sales of interest rate swaps failed to comply with at least one regulatory requirement. As a result, lenders must now conduct a full review of all its interest rate swaps sales, a task which lenders predict will take them around six months to complete, although this timeframe is far from guaranteed.

However some businesses are not afforded this amount of time; the Limitation Act 1980 sees to it that any claim not bought within six years of the interest rate swap start date will be unable to pursue court action.

This means businesses with agreements starting in 2007 could find themselves timed-out from claiming.

Content correct at time of publication