The Financial Conduct Authority has sought to reassure consumers that banks are processing interest rate swaps mis-selling claims, publishing a review of the compensation scheme which reveals that just 10 redress offers have so far been accepted worth a total of £500,000.
In an update on banks’ handling of interest rate hedging products compensation claims, the Financial Conduct Authority revealed that only 0.5 per cent of some 1,900 offers that are set to be made by banks have been accepted.
In addition to the 10 that have already been accepted, another 210 offers have gone out to customers and a further 1,700 are set to go out in the near future.
The FCA identified failings in the way some banks had sold IRHPs in summer of last year, and announced that those involved had agreed to review their sales of IRHPs made to certain customers since 2001.
Since the beginning of the review in March 2013 the banks have had to assess more than 85 per cent of total IRHP sales, representing approximately 25,000 sales.
The update from the regulator follows claims that banks are dragging their heels in paying compensation, with many cases apparently being challenged.
One case, which related to the period prior to the FCA review being established, saw Royal Bank of Scotland challenged over a refusal to compensate two small businessmen that have purchased a swap in 2005.
The Court of Appeal eventually rejected an appeal against the bank in July what was seen as a major test case, after upholding the original High Court’s judgement that the clients did not receive ‘advice’.
Martin Wheatley, chief executive of the FCA, said: “With 85 per cent 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.”