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Banks' rate swap mis-selling bill to top £1.5bn

by Michelle Abrego on Jan 21, 2013 at 08:00

Banks' rate swap mis-selling bill to top £1.5bn

HSBC, Royal Bank of Scotland (RBS), Lloyds and Barclays are facing a compensation bill over the mis-selling of controversial ‘rate swaps’ of more than double the £720 million they have already set aside, according to The Sunday Telegraph.

It cited a ‘senior banking source’ as claiming the banks would have to up their provisions, and claimed one of the four was set to treble its provision.

The Financial Services Authority (FSA) has set up a redress scheme over rate swap mis-selling, with 11 banks having signed up to it. Banks have sold around 28,000 of the products, which were meant to protect against inflation rises, to small and medium-sized businesses.

News of the likely increase in bank provisions comes as RBS faces the prospect of an appeal against its victory in what was thought to be the first swaps case to reach the High Court.

Hotelier Paul Rowley and business partner John Green have instructed lawyers to appeal the ruling, arguing the pair were mis-sold an interest ate swap.

Jon Green of law firm Clarke Wilmott, which is representing the pair, said: 'Banks are required by the FSA to be clear and fair in their discussions with clients and to ensure that their clients understand the nature of the risks inherent in these products.  It is clear to me that RBS failed to do that.'

3 comments so far. Why not have your say?

Ian Lees

Jan 21, 2013 at 08:48

How interresting - all these racketerring bankks - now insolvent - are being fined e.g £ 229 Million pounds against Barclys - who is funded by the middle east - and RBS ( the Robbing Bank of Scotland owned by HM Treasury -- as is LloydsTSB ( anither edinburgh bank ) - on behalf of the tax payer. Put simply the insolvent TSB and RBS - will have the tax payer paying these fines. Unfortunatley, TSB and RBS do not allow cheques to be written - because they are a promise to pay the bearer - and the banks have broken their promises - to pay both the " bearere" and everyone else. It is interesting that Stephen Hester will pay a cheque to HM Treasury as part of his fine - from an insolvent bank - who is funded by the tax payer - whilst hector walks away with a knighthood, pension bonuses and job and salary at middle eastern owned bank Barclays. I have long been impressed by the skill care and work involved by " The Great Train Robbers" - but this is the biggest fraud I have experienced " The Great British Robbery ", - by the UK Government . No wonder Salmond wants " SEPARATION - from Scotland !"

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Jan 21, 2013 at 09:10

When are the regulators going to start fining PEOPLE.

Banks employ people and it is these people who mis-sell.

Senior people employed by the banks mis-sell at industrial levels and take home phone number pay cheques.

From the Head of (Mis)Sales upwards these people should be writing very large PERSONAL cheques. If they don't have enough money in savings, investments and property to meet the fines there's always hundreds of millions swilling around in their pensions.

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Ian Lees

Jan 21, 2013 at 10:50

@Billyblackstone The regulators do not have the " power" claims hector of the Hood ? The reality is those working for insolvent banks are forced to swindle ( not miss sell ) customers out of their savings - to prop up the tax payer owned banks. Fines and other reports by the regulators have not yet been paid. Confirmed claims on PPI have not been paid out . It seems that if the bank rectify's the situation - the reality of fraud applied by the Governers of the Bank and the Directors and the Chairman is . . . ignored. When I worked for scottish widows - we were expected to cheat brokers - to obtian business - and worry about the consequences later ( for the benenfit of bonuses for management and their employers - fraudulent and corrupt directors.

I refer to this as the Incompetent running the incontinent ! ?!

Banks can force their employees to do theri bidding as a result of the power they exert on their managers pensions scheme payments. Do as I say or we will stop your pension - as commented by one manager ( see Natwest owned by RBS - the robbing bank of scotland ). The same applies to mny refusal to deceive - at the request of scottish widows management - under instruction and forced behaviour of the Directors and Chairman. This is one reason why the Trustees of Scottish Widows refuse to pay my full cash equivalent - becasue they can. They are protected by a reckless fraudulent PIA / FSA and soon to be FCA - corruption of the the most sinister kind - and the government are forcing " autoenrolment ",onto the voting public.

Auto Enrolment - the death tax !

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