Mis-sold
Interest Rate Swaps
Do you have
clients suffering under the weight
of swaps or collars? Taylors has a
specialist unit to support SME
clients wishing to mount claims
against the banks which mis-sold
interest rate swaps, collars and
structured collars (the “Swaps”).
The FSA recently brought this
issue into focus. Businesses of all
sizes are suffering as a result of
Swap deals. The Swaps are
sophisticated derivative products,
but many SMEs entered into them
without advice. While interest rate
caps can be useful products in
uncertain times, many Swaps that
were inappropriate to the needs of
individual businesses have been
sold.
Some banks encouraged customers
to believe that interest rates would
go up, as in previous recessions. In
fact the banks' internal predictions
suggested that interest rates would
come down. Others forced customers
into Swap deals by imposing a
condition on their loan offers. The
Swaps have left many SMEs locked
into paying an artificially high
rate of interest, unable to benefit
from the dramatic fall in base rates
and facing huge exit fees if they
want to get out of the Swap.
Few cases have come to Court so
far but most have been settled on
confidential terms, demonstrating
that the banks are anxious to avoid
a flood of litigation similar to PPI
claims. Following the probe by the
FSA, eleven banks have joined the
regulator's 'redress' scheme. This
scheme is intended to force the
banks to review their sales of Swaps
and compensate customers to whom
they have been mis-sold. Our view is
that clients should protect their
position by taking independent
advice and pursuing potential
claims, rather than relying on the
banks' own judgment of what
constitutes mis-selling.
Taylors are different from other
commercial law firms in that we do
not have any allegiances to the
banks. We are on no "bank panels"
and do not rely on the banks for
work or introductions. If you have
SME clients who have entered into a
Swap deal, we can help. Please
contact me at
tony.catterall@taylors.co.uk or
call 0844 8000 263.
Tony Catterall |
