Today the Financial Services Authority (FSA) announced the findings of its pilot study into the mis-selling of Interest Rate Hedging Products.
In response to this development, the Mitchell Farrar Group have expanded their claims management activity with the launch of All Square Treasury, a company focused on helping small and medium-sized businesses (SMEs) claim for mis-sold Interest Rate Swaps and other Interest Rate Hedging Products.
In the latest mis-selling episode to affect the banking industry, the FSA estimates that over 40,000 Interest Rate Hedging Products have been sold to businesses which, according to some estimates, could end up costing the banking industry more than £10 billion.
Many businesses have been hard-hit as they struggle to keep up with the unexpected payments they are required to make under these products. An FSA review conducted last year found ‘serious failings’ in the sale of Interest Rate Hedging Products, including evidence of the inappropriate sale of complex products and a number of other poor sales practices sufficient enough to justify action by the FSA.
Executive Chairman of the Mitchell Farrar Group, John Goodfellow says, “As one of the leading claims management firms in the UK, we are well positioned to apply our experience, resource and industry best-practice to this market”.
Daniel Hall, Managing Director of All Square Treasury, says, “Claims for the mis-selling of Interest Rate Hedging Products can be quite complex. Having a credible and knowledgeable firm with the necessary expertise will provide businesses with an additional resource and option to turn to for help”.
Commenting on today’s FSA announcement, Daniel Hall says, “We are encouraged by the findings of the pilot study which indicates that over 90% of sales did not comply with one or more regulatory requirements. This represents an important step for businesses to secure fair and reasonable redress although more clarity is required to understand exactly what this means”.
All Square Treasury intend to work closely with businesses to assist those struggling with mis-sold financial products. For further information please visit www.allsquare.co.uk or call 0800 0830 286.
About All Square Treasury
All Square Treasury was established in 2012 with the aim of helping small and medium-sized businesses (SMEs) with claims against banks for the mis-selling of Interest Rate Swaps and other mis-sold financial products.
By employing a team of financial service professionals, including ex-bankers, All Square Treasury are positioned to provide a professional claims service for businesses that have been affected by the mis-selling of bank treasury products.
Daniel Hall has over twelve years of financial services experience which includes eight years at Barclays Capital in Sales and Capital Markets and four years at Deloitte as a Treasury and Capital Markets Consultant. Daniel holds an MBA, an MSc in Banking & Finance, the Securities Institute Diploma and has been a Chartered Financial Analyst (CFA) since 2004.All Square Treasury is a trading style of Investor Compensation (UK) Limited, regulated by the Ministry of Justice in respect of regulated claims management activities (Number:CRM28889).
More about Interest Rate Swaps
An Interest Rate Swap is a financial instrument in which two parties agree to exchange cash flows relating to interest rates, based on a specified amount of money. One party will pay a fixed rate of interest and the other party will pay a floating rate of interest, usually linked to the Bank of England base rate or the London Interbank Offered Rate (LIBOR). Interest Rate Swaps can be used to protect, or hedge, against rises in interest rates as the bank will pay the business a floating rate amount based on a floating rate each month/quarter.
More about Interest Rate Swaps Mis-selling
The FSA report, “Interest rate hedging products – Information about our work and findings” published in July 2012 found “serious failings” in the sale of the products designed to protect firms taking out Loans against rising interest rates. These findings uncovered a number of poor sales practices across a number of products, including:
• Poor disclosure of exit costs
• Failure to ascertain the customers’ understanding of risk
• Non advised sales straying into advice
• ‘Over-hedging’ (where the amounts and/or duration did not match the underlying loans)
• Rewards and incentives being a driver of these practices