SMEs selling assets to keep head above water
A number of businesses who are waiting for compensation for interest rate swaps mis selling are being forced to sell assets in order to pay their outgoings, new research claims.
According to the Yorkshire Post some farmers have had to sell of parts of their land after banks failed to make a decision on their case or issue agreed redress.
Simon Cottrell is the Senior Partner at Goldsmith Williams Solicitors. His team of commercial litigation specialists are helping businesses affected by interest rate swaps mis selling:
“It’s a sad state of affairs when the businesses selling assets could actually be seen as the lucky ones; at least they have some means of keeping their businesses afloat. Others are not so lucky and every day face the prospect of going under whilst bankers are sitting pretty with their latest bonuses.”
Thousands of businesses are believed to have been mis sold these highly complex financial products; the Financial Conduct Authority (FCA) pilot review scheme revealed 9 out 10 cases failed to meet regulatory requirements. As a result banks were ordered to review their sales practice of these products.
“The results of the FCA pilot were released over a year ago and yet only a fraction of affected businesses have seen any form of compensation,” Simon continues. “While this is clearly not good enough, I am more worried about the misconception the scheme is triggering.
“Businesses believe that the scheme guarantees them redress. It doesn’t. It’s simply telling the banks to look into cases not automatically compensate them. As a result business owners are completely unprepared. They are attending meetings with either the bank or independent reviewer, who let’s not forget is appointed by the bank, without legal representation and unwittingly damage their chance of redress.
“It all boils down to this – businesses are in this mess because they have been failed by the banks so why would you trust them to help you recover redress?
“As part of our service to businesses, we will not only endeavour to recover the full extent of the swap including all payments made under it, consequential losses incurred and any break costs, we also aim to have their fees frozen throughout their review process which can help alleviate some of the immediate financial pressure.”
Content correct at time of publication