“Spring is sprung, the grass is riz, I wonder where dem birdies is.” (Anon)
Interest rate swaps may no longer be front-page news, however, the FCA approved Bank review of swaps is very much still on a roll. Whilst there has not yet been an announcement of the “end date” to the FCA review, it is clear that the Banks are starting to process claims with vigour and that any clients submitting claims should do so without delay!
Typically the Bank is offering initial redress where the criteria for mis-spelling is shown, either in the form of a full tear-up of the swap agreement (with a refund of all payments) or alternatively compensation on an alternate product basis.
The initial redness is often accompanied by an offer of compensatory interest at 8% p.a. on refunded payments; however, this should not necessarily be accepted as a matter of course. Advice should always be sought on the merits of other claims, including loss of profits or additional costs of borrowing. If you have submitted a claim or have just received an offer and are unsure how to respond, Gorvins are here to offer you practical first-hand advice.
In terms, the practical issues presently being faced by Bank customers are the shortness of time to accept the offer of redress, whether it is possible to split the offer and whether the FCA should more actively regulate the redress process. Sophisticated customers remain outside the scheme, but the pressure is mounting for this scheme to be widened.
Whilst the scheme undoubtedly has its limitations, many small and medium-sized businesses will receive offers of redress over the next few weeks. Once received, it is important that advice is sought quickly; planning the “next steps” in advance of a possible offer is very much the order of the day. The Banks may have assumed certain responsibilities to customers as part of the review process but of course, will act commercially and try to limit their exposure. No criticism there, but forewarned is forearmed.
Remember the Banks impose a time limit to accept these offers; with periods of 14, 28 or 40 days not uncommon. Whilst a short extension may be granted (at the discretion of the Bank), it is in the Bank’s interest to finalise claims as quickly as possible.
So, in the words of the poem “Spring is sprung”, so don’t wait for the redress letter, “up and at-em” now and contact Michael Morris on 0161 930 5151.