The Financial Conduct Authority (“FCA”) has once again published updated statistics in relation to claims for consequential loss made by customers who were mis-sold interest rate hedging products (“IRHPs”). The statistics are up to date as at the end of March 2015 but have only just been published by the FCA.
The statistics once again show the apparent approach of the banks to limit their exposure and take advantage of a perceived lack of supervision by the FCA and Independent Reviewers. Many customers will be aware that permission has been given for a judicial review of the processes followed by the Independent Reviewer in one case, Holmcroft Properties Limited v KPMG. The case may yet re-open review determinations for thousands of customers mis-sold IRHPs.
The FCA last published statistics relating to the progress of so-called “bespoke” consequential loss claims up to the end of December 2014. Bespoke consequential loss claims are made by those customers who believe that they have suffered an additional loss as a result of the mis-sale of an IRHP which is not compensated by the 8% interest the customer received when receiving its basic redress offer. We can now see three quarters’ worth of statistics showing the worrying trend that most customers who submit bespoke consequential loss claims are likely to receive nothing or nominal amounts up to £9,999. The banks are not loosening their grip on the purse strings which hold the billions of pounds they have set aside to compensate customers.
A comparison of the September, December 2014 and March 2015 statistics taken from the FCA website shows that progress continues to be slow and disappointing:
|Progress of bespoke consequential loss claims
|Number of customers who have submitted a bespoke claim
|% Assessments complete
|Analysis of completed assessments of bespoke claims (amount payable over and above 8% a yr)
|No additional redress
|£1 to £9,999
|£10,000 to £99,999
|£100,000 to £999,999
|Consequential losses payable
||8% a year added to every offer
|Additional losses payable over and above 8% a year
|Total consequential losses payable inclusive of 8% a yr
|Average consequential loss payable inclusive of 8% a yr
Only 2 out of 4,087 claims for bespoke consequential loss submitted have crept over the £1,000,000 compensation mark. When compared with the £4.4 billion set aside by the banks to compensate small businesses, this represents a tiny fraction.
The specialist IRHP unit at Taylors is continuing to support businesses who wish to pursue consequential loss claims by seeking accountancy and valuation support, involving local Members of Parliament and challenging bank determinations. If the 8% interest you have received has not compensated you for your consequential loss or the offer you have received represents another attempt by the bank to “handle” you, please get in touch.
Taylors is different from the vast majority of commercial law firms in that it does not have any allegiance to the banks and are not on any “bank panels”.
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