Between 2001 and 2009, when the UK’s banks arranged loans, they often sold interest rate hedging instruments also known as ‘swaps’, ‘caps’ and ‘collars’ as protection against interest rates rising. A report published in 2012 by the Financial Services Authority (now the Financial Conduct Authority) found that the vast majority of these products were mis-sold.
Many of these products were sold to companies that had substantial assets and were often sold as a condition of receiving a loan or mortgage. Typical business sectors included (but weren’t exclusive to) care homes, farming, hotels and golf courses as well as buy-to-let entrepreneurs.
These interest rate hedging instruments provided borrowers with a degree of confidence about the re-payments they would make. Unfortunately, many of these products came with very high costs if the borrower decided to exit the product before maturity. These terms can commonly be found in tailored business loans.
In many cases these hidden costs were not explained properly, leaving the borrower unable to refinance their loan. When the banks base rates fell as the economic crisis hit in 2008, borrowing costs rose significantly rather than falling or remaining the same.
The financial institution has to ensure that any product sold is appropriate and suitable for a customer’s needs. A recent example is the Payment Protection Insurance (PPI) claims that are being made up and down the country after many customers were mis-sold in to these contracts.
A number of banks are now contacting customers who were sold these products to ask if they would like their case reviewed. If you are approached by your bank and are successful following their review, you may be offered a repayment, plus statutory interest. By accepting the banks offer, you may be losing out as further losses could be claimed. We will help you claim all the money you deserve, in full.
How can we help you?
If you think that you or your business were sold one of these products then we can review your paperwork to establish whether there is an opportunity for a repayment. We can also make a claim for further compensation as a result of any excess payments made.
For further information about mis-sold bank products or to find out how we can help you please contact us on 01228 713070.