Overcast

Overcast

max temp: 6°C

min temp: 3°C

ESTD 1874 Search

Banking: Compensation payouts over rate-swap mis-selling nearly double in a month

11:49 10 January 2014

The rate of compensation payouts over rate-swap mis-selling increased markedly in December, new figures have revealed.

The rate of compensation payouts over rate-swap mis-selling increased markedly in December, new figures have revealed.

Banks have increased the pace of granting compensation to small businesses over allegations that they were mis-sold complex financial products, with pay-outs reaching £158.6million in December.

It means the total nearly doubled in just a month, after standing at £81.2m at the end of November, according to figures from the Financial Conduct Authority (FCA).

However the figure represents just a small proportion of the £3billion set aside by major lenders so far to cover the costs of making redress to victims, although that figure will also include the expense of administering the scheme.

The FCA has previously written to the chief executives of Royal Bank of Scotland, HSBC, Barclays and Lloyds urging them to increase the pace of compensation for the interest rate swap products.

Martin Wheatley, head of the City regulator, has said the delays compound the unfairness of selling a complex product to companies without an understanding of the risks, leaving many struggling to make ends meet.

But the FCA adopted a more positive tone when it issued its monthly update on the scheme today.

It said a total of 1,040 offers of compensation had been accepted by customers by the end of December, up from 547 in November.

Director of supervision Clive Adamson said: “Banks have picked up the pace since November; we asked that they focus their efforts on making far more rapid progress in assessing individual cases and crucially in providing redress.

“May remains the target for all offers to have been sent out and the banks involved are working towards that. Any affected business that has been invited to join the scheme and hasn’t needs to act now so they can receive the redress they’re due.”

A total of 18,700 customers had been invited to join the review by the end of December.

Anthony Browne, chief executive of the British Bankers’ Association, said: “Anyone who wrongly suffered as a result of having been mis-sold an interest rate hedging product will get appropriate and fair redress.

“Banks are working hard to complete the reviews and as the regulator notes today the process is speeding up.”

Search hundreds of local jobs at Jobs24

0 comments

Ipswich wet dock in 1850, from the IMT Photographic Archive, including medieval buildings at Smart's Wharf

Illustrated talk about the hisotry of Ipswich docks and the river Orwell

Sports Direct boss Mike Ashley outside its headquarters in Shirebrook, Derbyshire.
Photo: Joe Giddens/PA Wire

Scandal-hit retailer Sports Direct and online grocer Ocado are set to update the City on trading this week as the fall in sterling and the supermarket price war continue to dominate.

The Suffolk Coastal District Council offices at Melton Hill have been sold for re-development, subject to planning permission being granted

Former Suffolk Coastal District Council, Melton Hill offices are sold for re-development

Becky Sebright-King, owner of Lady Bakewell Park, at the launch of Small Business Saturday 2016.

As the Christmas shopping season gets into full swing, it’s more important than ever to support our local traders.

The Octagon  in Colchester, where travel management company Gray Dawes is based.

Essex-based travel management group Gray Dawes is to double in size following the simultaneous completion of two acquisitions.

Management Jobs

Show Job Lists

Most read

Topic pages

Streetlife

Newsletter Sign Up

Sign up to the following newsletters:

MyDate24 MyPhotos24