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FCA sees 'rapid' rise in swap compensation as banks return £500k
by Dylan Lobo on Sep 04, 2013 at 07:40
The Financial Conduct Authority (FCA) has said banks have started paying compensation over the mis-sale of interest rate hedging products (IRHR) and expects to see a 'rapid' rise in redress.
The FCA identified failings in the way that some banks sold IRHPs in the summer of 2012, which led the banks involved to agree to review their sales of IRHPs made to certain customers since 2001.
The banks then tested their approaches to carrying out the review and in early 2013, the FCA published the findings of the pilot exercise. The FCA also announced then that the banks had agreed to conduct their reviews using the approach set out in the FCA’s report.
Since the beginning of the full review in May 2013, and with over 30,000 cases to review, the banks involved have taken on 2,800 staff to work through claims and have so far reviewed in excess of five million documents.
By the end of August, 10 offers of redress have been accepted by the banks, totalling £500,000. The FCA expects this figure to increase rapidly over the coming months – 210 offers have already been sent to customers with a further 1,700 offers due to go out shortly.
More than 25,000 sales (85% of the total number of sales) are in the process of being assessed and the first letters offering compensation have been sent out.
The FCA expects that most customers will be informed of the result of their review, and of any possible basic redress, by the end of the year.
Martin Wheatley, chief executive of the FCA said in a statement: ‘With 85% of cases now under review, banks have made progress. But like the thousands of affected small businesses, we want to see redress paid quickly to those who have suffered loss as the result of mis-selling.’
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by James Phillipps on Dec 09, 2013 at 07:52