Banks face new wave of mis-selling payouts

31 January 2013

Britain's banks are, quite possibly, the most hated people in history. They're worse than Nazis and Manchester United fans. And things are going to get worse for them as they've been collectively told that they are facing yet more massive compensation bills after a review of products sold to small businesses found more than 90% had been mis-sold.

The FSA said that a significant number of cases were likely to result in payouts being handed out to customers, with as many as 40,000 of the interest rate swaps being mis-sold to small businesses since the end of 2001.

The FSA today said the UK's big four banks (Barclays, HSBC, Lloyds and RBS) have already agreed to start reviewing individual sales and providing compo. And how much will this cost? It could reach the nosebleed heights of £1.5 billion across the sector.

Interest rate swaps were sold as protection against interest rate rises, however, small businesses soon found they were being lumbered with huge bills after the financial crisis.

Martin Wheatley, chief executive designate of the Financial Conduct Authority, said he hoped the FSA's actions will ensure a fair and reasonable outcome, adding: "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. But it is important to remember that this review is firmly focused on the particular circumstances of each sale. These will determine whether there were failings in the sales process and, if so, whether redress is due."

 

TOPICS:   Banking   Investments

4 comments

  • jim
    ahh bankers. only industry where you still get big bonuses even if you cause the entire world economy to go down the drain. bless them and their little mistakes.
  • Sicknote
    Interest rate swaps products have to be the most vile product ever devised by bank economists. The product was originally designed to protect small business if interest rates went up; secretly though, all the banks including mine knew rates would be hitting the floor for years to come.
  • ExCrement
    so as each investigation reveals fraud, mis selling, money grabbing and fat cat gluttony I wondered if a wholesale review of the complete industry and all thier nefarious activities. oh wait that would need to be sanctioned by the politicians...havent we had some similar issues with them. The whole caboosh corrupt and simply a nest fethering for the powerful. FUCK THEM ALL.
  • Will O.
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