“The process doesn’t have the confidence of everyone — victims feel banks are leading the FCA rather than the other way around. And that has been our impression, too.” – Alison Loveday
This week The Times highlighted the further failures of the Financial Conduct Authority (FCA) as the IRHP review scheme once again comes under scrutiny. The regulator set out to establish a fair redress scheme that would compensate companies that were mis-sold
complicated derivatives products. It appears instead, in light of last week’s news , the FCA had struck a secret deal with banks to water down the review, cutting banks’ compensation bills in the process.
It adds further weight to concerns about the lack of transparency. Berg’s managing partner Alison Loveday who, along with our banking and financial dispute team, is representing a number of businesses impacted by interest rate swaps mis-selling, says that there
is a lack of transparency over how decisions are made when consequential loss claims are rejected: “We have compiled reports we’d be willing to go into court with and we are not getting the outcomes we’d expect, but you’re given little idea why things are
Andrew Tyrie, chairman of the Treasury Select Committee, says that MPs are “very concerned that terms of the FCA’s redress scheme may, in some cases, have provided banks with an opportunity not to provide meaningful redress. Many firms feel that this process
has unfairly favoured the banks.”
Berg believes that an independent review is needed and in September last year warned that the FCA could come under threat of Judicial Review due to the failings of the redress scheme .
We have now seen Bully Banks, a lobby group representing thousands of small businesses, state that they will ask for a judicial review of the process led by the Financial Conduct Authority and will file a legal claim within days.
Berg has called upon the FCA to offer official guidance for firms dissatisfied with review outcomes, after witnessing what we believe to be a rushed conclusion to the process and
it is clear that it is not the banks alone but the regulators who have also lost the trust of many businesses.
Alison commented “Even if you are positive about the outcome of the process, it’s in everyone’s interests — and for public confidence in the regulator — for the outcomes to be properly reviewed now.”
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For more information about any of the above or for practical advice on this or any other aspect of banking and financial disputes, please contact the Berg Banking Litigation Team on 0161 829 2599 or email
Alison Loveday at
(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its 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 this article.)