Banks Compensate SMEs for Mis-sold “swaps” Policies

The Financial Services Authority (FSA) says that four major banks have mis-sold specialist insurance, known as interest rate swaps, to thousands of small businesses. Since 2001, about 28,000 interest rate protection products have been sold to thousands of small firms. As interest rates have fallen, SMEs have had to pay the banks money under the terms of the policy. The alternative option — cancelling the policy — carried very heavy penalties. The FSA has announced that it has reached agreements with Barclays, HSBC, Lloyds and RBS over providing “redress”. Speaking on the BBC Radio 4 Today programme, the managing director of the FSA’s conduct business unit, Martin Wheatley, described the policies as “complex products that people shouldn’t have had in the first place&... »