Banks can't even say 'sorry' right

11 March 2015

bank_sign MPs have filed a report which shows that scores of businesses who were missold financial products by banks have also been treated unfairly with the resulting compensation.

So, if you're a business-owner who was missold an interest rate hedging product, you might be hearing from your bank again, as the report said that the “redress must be fair and reasonable”, and that “redress should aim to put customers back in the position they would have been in had the breach of regulatory requirements not occurred.”

However, there's a problem - this advice is open to interpretation by the banks, and seeing as they've got form for really not giving two hoots about their customers, this means as they review each case, they're inevitably going to do someone over.

Chairman of the Treasury Committee, Andrew Tyrie MP, said: "Many small businesses have been badly hit by the complex terms of the IRHPs offered by their bank. A significant number of those firms who were missold these hedging products feel that, having been ripped off in the first place, they have now been treated unfairly again by the FCA’s IRHP redress scheme."

"It is far from clear that the FCA’s scheme has delivered fair and reasonable redress to all the businesses affected. The FCA needs to do much more to demonstrate that this process is credible and has not unduly favoured the banks. As part of this work, the FCA should collect the information necessary to establish whether there are systemic failures in the review."

"This would benefit from independent oversight. It should publish its findings. “Greater transparency is crucial in order to ensure that those SMEs mis-sold these products receive – and are seen to receive – appropriate redress. The Financial Services Act provides for the Treasury to require for this type of work to be done. But hopefully this won’t be necessary."

With any luck, an independent body will oversee these cases in a bid to work in the favour of the customers, but don't hold your breath.

TOPICS:   Banking

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