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Wednesday, 20 June 2012

A back bench debate on the mis-selling of interest rate swap arrangements had now been fixed for Thursday, 21 June 2012.

The issue has been forced through by MP Guto Bebb and other MP's on both sides of the house who have brought this issue into the House of Commons for debate.

The debate will come just before the FSA's report following the full investigation into this issue – it's due at the end of this month.

The FSA have confirmed that it is undertaking more work to understand in detail the types of products that have been sold.

Adair Turner the Chairman of the FSA has written to Andrew Tyrie MP, the Chairman of the Treasury Committee and confirmed... "At one end of the spectrum are relatively simple fixed rate loans (in some respects comparable in nature to fixed rate mortgages) but some banks have also sold a number of more complex products, including "structured Collars", which may introduce a degree of interest rates speculation and are thus less likely to "meet customer's needs".  Whether this is the case will be an important issue to consider. The requirement to meet customer's needs is a key protection afforded to all retail customers whether or not they have the right to complain to the Ombudsman.

Adair Turner goes on to confirm that the FSA will help to assess the scale and severity of any potential issues.  He confirms that the areas the FSA is looking at include product design, sales process and practices and incentives.  If wide spread evidence of breaches of FSA Rules or mis-selling is found, the FSA has confirmed that it will take action.

It is also said that the FSA may reconsider the limits which have previously been established for Ombudsman eligibility and the compensation limit, and whether or not these remain appropriate.

If you have any concerns regarding mis-selling then it is important that you take advice and also advise the FSA to ensure that so far as possible they have a clear understanding and full knowledge of the issues customers are experiencing.  Only then can the action it chooses to take be appropriate to the real problem and impact this is having on businesses.

To discuss how we can provide further advice in connection with these issues, please contact Alison Loveday, Managing Partner, by email to alisonl@berg.co.uk or alternatively you can call Alison on 0161 833 9211.

The information and opinions contained in this article are not intended to be comprehensive or to provide legal advice. No responsibility for article's accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of the contents of this article.