November’s compensation for mis-sold IRHPs hits £81.2m, reports FCA

Last month, banks paid out £81.2m to compensate businesses for these mis-sold products.

The FCA’s director of supervision said that three out of four banks, which had been contacted last month by the watchdog to demand quicker results from their redress processes, have now stated that they expect to complete all redress determinations by May 2014.

The regulator wrote to the chief executives of Royal Bank of Scotland, HSBC, Lloyds Banking Group and Barclays to express concerns regarding the time it was taking to resolve complaints over the sale of interest-rate swaps and other complex derivative products from 2001 onwards.

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Following on from this, an update published last week by the financial services regulator revealed that 547 offers of compensation had been accepted so far, up from 125 in October, while 6100 customers were in the redress phase.

While welcoming the upsurge in activity, Mr Adamson said the FCA would continue to “keep the pressure on”.

Compensation for mis-sold interest-rate hedging products (Source FCA)

October November
Customers in redress phase41006,100
Customers invited to join review17,50018,400
Offers accepted125547
Redress paid£15.3m£81.2m

Adviser view

Andy Wilson, director of Lincolnshire-based Andy Wilson Financial Services, said: “I think we have all become anaesthetised to bad news regarding the behaviour of banks. They make a risk-based judgement on these types of matters, and if it does not come off they’ll just pay the penalty, which I believe is wrong.”