The FCA has now divulged information relating to the second stage of the review into the sale of interest rate hedging products – the assessment of consequential losses.
After two years of the Review process in action, the FCA have reported that only £0.7 mil has been paid out in consequential loss payments to 400 people (around 19% of the assessments that have been made). Only 2,060 such claims have been made within the FCA
led review into the historic sale of Interest Rate Hedging Products. This equates to an average consequential loss payment of £1,800 per successful customer.
The average payment per customer is astonishing given that in 2013 it was estimated by DTZ that in the property sector alone,
compensation payments under the Review would be up to £10 billion . As matters stand, the entire review has paid out £1.5 billion and the consequential loss process has paid out £0.7% – a tenth of what DTZ estimated the property sector alone would get.
Currently the Review has paid out £1.592 billion in primary redress (ie. the refund of cash flows) and
£0.7 million in consequential loss payments . At this stage, with a total of 20% of the assessments completed by all banks, either the remaining 80% of consequential assessments are estimated to receive £9 billion (at an average of around £5,421,686.77
per customer), or there needs to be an explanation as to why the banks are not providing the kind of redress that had been expected.
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
of the Berg Banking Litigation Team on 0161 833 9211 or email him 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.)