Campaigners want FCA to take tougher line on those that ‘mis-sold’
A CAMPAIGN group representing small businesses has called on UK authorities to take a tougher line on banks found to have mis-sold financial products.
Bully-Banks, which was set up by small business owners in 2011 to pursue complaints against banks for their conduct in selling interest-rate swap agreements (IRSAs), is appealing to the Financial Conduct Authority (FCA) to tackle what it described as “long delays” faced by businesses to get their money back from banks. It claims 4500 pubs, restaurants and hotels are affected.
The group’s calls follow the implementation of the FCA’s ‘review and redress’ scheme, which has compelled banks to review the sale of over 30,000 IRSAs to small businesses.
Under the review, if a case of mis-selling is proven, small businesses are entitled to compensation from banks in the form of a refund of the money paid out under the IRSA, plus interest and an additional compensation for ‘consequential losses’ incurred due to the mis-sale.
However, due to the complex nature of calculating these losses, Bully-Banks said banks are delaying paying out refunds to small businesses until the consequential losses have been agreed.
The campaign group said the current process is “grossly unfair” and has called for the FCA to establish a principle of instant repayment of the refund once it has been determined an IRSA has been mis-sold.
“An IOU from a bank just isn’t good enough,” said Jeremy Roe, chairman of Bully-Banks.
“SME mis-selling victims should get back the money they have paid under the mis-sold IRSA, with interest, as soon as possible to enable them to start to repair the damage done to their business.
“That prompt payment of the agreed damages would be the normal process in litigation.
“SMEs need immediate restitution. Many of these businesses are experiencing real financial distress.
“We are demanding urgent action from the FCA. We are witnessing the continued delay of justice – and it’s hitting small businesses hard and damaging the wider economic recovery.”
Also known as derivatives or hedges, IRSAs are complex financial products often sold with a lending package as protection against rising interest rates.
