The Royal Bank of Scotland has contacted customers to inform them of the process it will undertake to review sales of interest rate hedging products since 1 December 2001, in line with an announcement from the regulator in June.
Customers with more complex products that fall within the scope of the review will automatically have their sales reviewed, while those with more standard products will be given the option of having their sales reviewed.
Those customers who purchased cap products will only be included in the scope of the review if they make a complaint.
All relevant customers will be written to by the bank. All reviews of products will be overseen by an independent adjudicator appointed by the Financial Services Authority.
RBS confirmed that the review only applies to customers that are deemed to be “non-sophisticated”.
Earlier this summer (29 June), the FSA found a range of “poor sales practices” in the sale of interest rate hedging products to small and medium enterprises by four banks including Barclays, HSBC, Lloyds and RBS.
Shortly thereafter the FSA expanded its investigation to include seven more banks: Allied Irish Bank UK, Bank of Ireland, Clydesdale and Yorkshire banks, Co-operative Bank, Northern Bank and Santander UK.