Banks mis-sold 90 per cent of products t

Banks mis-sold 90 per cent of products to small businesses, says FSA

The Financial Services Authority (FSA) has confirmed that four major UK banks will start a full review into the mis-selling of products to small businesses, after it found that nine out of 10 sales did not meet regulatory requirements.

Under its own pilot review into the mis-selling of interest rate hedging products (IRHPs) to small businesses, the FSA confirmed that a ‘significant’ number were mis-sold and are likely to result in compensation being given to the customer.

Barclays, HSBC, Lloyds and Royal Bank of Scotland have been ordered to conduct a review of all IRHP sales to small businesses that ‘were unlikely to understand the risks associated with those products.’

The FSA found that over 90 per cent of the 173 sales it analysed were non-compliant. It estimates that around 40,000 ‘swap’ products were sold to small businesses over the last decade.

Martin Wheatley, CEO designate of the Financial Conduct Authority (soon to replace the FSA), said: “This marks significant progress in our review of these products. We believe that our work will ensure a fair and reasonable outcome for small and unsophisticated businesses.”

“Small businesses will now see the result of the review as the banks look at their individual cases. Where redress is due, businesses will be put back into the position they should have been without the mis-sale. But it is important to remember that this review is firmly focused on the particular circumstances of each sale. These will determine whether there were failings in the sales process and, if so, whether redress is due.”

Responding to the FSA’s announcement, the Federation of Small Businesses (FSB) said it welcomed the broadening of criteria of those affected so that firms will not be locked out of the redress scheme. However, it is concerned that payments had not been automatically suspended.

National Chairman of the FSB John Walker said: “Now the pressure is on the banks to contact its customers. They must do so quickly and decisively to draw a line under this matter and bring the situation to a close.”

The FSA’s review into a further six banks will be completed in the next couple of weeks.

Business news

Business tax
Government Announcements
PAYE and NI
Pensions savings investments
Personal tax
Regulations
VAT

Related guides

Alternative ways of extracting profit

Safeguard business ideas and intellectual property

Reduce your wage bill

Protect your goodwill

Business debit and credit cards – pros and cons

Related services

Forensic accounting

Business startup

Related news

Multinationals warned over UK corporation tax

One in five still clearing Christmas 2011 debt

Incentives boost for start-up business investors

Digital industry pumps £800 million into Northern Ireland economy

Business investment in plant, machinery and IT grows

About us

About ABG
ABG photos
Client testimonials
FAQ

Our people
Partners
Consultants
Managers

International
French
German
Spanish

Corporate Social Responsiblity
Environmental

Visiting us

Careers
Join our talent community
Learning & Development
Vacancies
Why join ABG

Services

Core Services
Audit
Business startup
Business support
Corporate tax planning
Forensic accounting
Personal tax planning
Self assessment
Trusts and executorships
VAT advice

Business Support Services
Introducing ABG Business Support Services
Bookkeeping
Payroll
Preparation of cashflows and forecasts
Preparation of management accounts
VAT returns
Business Record Checks

Corporate Finance
Introducing ABG Corporate Finance
Examples of our work
Exiting
Growing
Investing
Reaping

Wealth Management
Corporate planning
Investment planning
Retirement planning
Taxation planning

Sectors

Technology & Media
Hardware
IT contractors
Marketing & advertising
PR & media
Printing & publishing…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s