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SMEs owed billions from interest rate compensation

31 January 2013 #News #Sales #Top Stories #Truck #Van

Billions of pounds in compensation is likely to be paid out to small and medium-sized businesses following the mis-selling of Interest Rate Hedging Products (IRHP).

Four of Britain’s largest banks ­– Barclays, HSBC, Lloyds and RBS – will now conduct a full review into their activities following the FSA’s own investigation into the selling of variable interest loans linked to complicated bets on rate changes.

The FSA had found that more than 90% of 173 IRHPs sold to SMEs did not comply with ‘at least one or more regulatory requirement’. Evidence from customers also played an important part in assessing the sales.

Companies that have been affected by the mis-selling will be contacted by their banks directly, the FSA says, and will receive.

Martin Wheatley, CEO of the Financial Conduct Authority, said: ‘Small businesses will now see the result of the review as the banks look at their individual cases. Where redress is due, businesses will be put back into the position they should have been without the mis-sale.’

The FSA says it is aiming to confirm on February, that Allied Irish Bank (UK), Bank of Ireland, Clydesdale and Yorkshire banks, Co-Operative Bank, and Santander UK will also announce reviews of the way they sold IRHPs.