Over the course of the last two years we have blogged quite regularly about the FCA Review of Interest Rate Hedging Products. It would appear that the bank led review process is currently in the process of winding down as most cases have been processed and decisions issued. So far 17,000 businesses have gone through the review process with £1.8 billion being paid out in redress payments.
Following this trend the FCA has announced a deadline of the 31 March 2015 for all claims to be submitted in to the redress scheme. This deadline affects all swap customers who feel they were mis-sold hedging products but who were not automatically considered part of the review process by their banks.
This deadline will also affect customers who took out interest rate caps. Previously customers who purchased these products were told that they would only be included in the review if they complained to their bank.
The reason for this is that caps were considered to be the most straightforward of all of the hedging products. Furthermore they often did not result in as big losses for customers compared to collars and swaps. Whilst taking out a cap would incur an upfront cost (swaps and collars did not), getting out of a cap would not result in breakage costs. As such one of the key elements of miss selling, the failure to adequately explain breakage costs, was absent from cap sales.
That said, in some cases, these products were still undoubtedly miss sold.
It is worth bearing in mind that missing this deadline will not be fatal in all cases to making a claim out with the review process. Customers may be able to:
We have recently seen some banks writing to customers who have not to date been part of the scheme to make them aware of this deadline. This however is not the case with all banks and the onus is on the customer to make the complaint in order to ensure they are part of the review.
If you have any queries arising from this article, please contact our Dispute Resolution team on 0131 226 8200.
DISCLAIMER: While every effort has been made to ensure the accuracy of this blog post, it is not intended to provide legal advice as individual situations will differ. No recipients of content in this blog post should act or refrain from acting on the basis of the blog post without seeking the appropriate legal advice on the particular facts and circumstances at issue from a qualified solicitor in their jurisdiction. The blog post is for general information only and is not legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. No solicitor-client relationship is formed nor should any such relationship be implied. If you require legal advice, please consult with a solicitor qualified to practise in your jurisdiction.