Now more than ever, it is imperative that individuals as well as businesses review their financial products, loans and investments and take legal advice as to whether they have been properly advised and what, if any, action can be taken.
Liverpool, UK (PRWEB UK) 30 November 2012
The issue of Interest Rate Swaps has been a hot topic in recent months, with the Telegraph reporting last month that two British banks had been ordered by the Financial Ombudsman Service (FOS) to pay hundreds of thousands of pounds in compensation to customers who claimed they had been mis-sold the product (http://www.telegraph.co.uk/finance/rate-swap-scandal/9631784/Banks-ordered-to-pay-compensation-to-swap-mis-selling-victims.html).
A Swap is a complex financial derivative that should ideally only be entered into by either investment professionals or corporations being advised by suitably qualified investment professionals. In the products currently under scrutiny, the Swap runs alongside the original loan.
Interest Rate Swap and derivative products offer savvy borrowers a valuable facility, can save them money and allow them to fix financing costs. These products are very lucrative for the banks which sell them, which has led to allegations of mis-selling being filed by some businesses (http://www.telegraph.co.uk/finance/rate-swap-scandal/9576244/Small-firm-fears-over-mis-selling-compensation.html).
In a judgement released by the FOS, the unnamed banks, thought to be two of the high street’s biggest lenders, were accused of selling the Interest Rate Swaps to their respective customers “primarily for the bank’s commercial convenience and with little or no attention to the needs of its client”.
It has been revealed that a number of British high street banks have been selling the so-called “swaps” to thousands of small and medium sized businesses, despite the swaps being financially inappropriate for most of these businesses.
Interest Rate Swaps have proven to be too complex for businesses and financially dangerous, to the extent that some companies had been forced into administration due to the monetary demands that the swaps had placed on them.
Originally the Financial Ombudsman Service had found in favour of the banks, but the overturned ruling could lead to a flurry of new compensation claims being filed; the Financial Services Authority estimates that more than 40,000 Interest Rate Swaps have been sold to small and medium businesses by their banks.
Ciaran Montague, Senior Associate at Gregory Abrams Davidson Solicitors said “Now more than ever, it is imperative that individuals as well as businesses review their financial products, loans and investments and take legal advice as to whether they have been properly advised and what, if any, action can be taken.”
If you or your business has been affected by a mis-sold Interest Rate Swap product, contact Gregory Abrams Davidson Solicitors to assist with your claim. Gregory Abrams Davidson LLP is a national firm of solicitors with over three decades’ experience of dealing with issues such as interest rate swap mis-selling.
You can contact Gregory Abrams Davidson solicitors by calling 0151 236 5000, or visiting their website at http://www.gadllp.co.uk/business-clients/interest-rate-swap-mis-selling/ and a member of the Gregory Abrams Davidson team will be able to advise you on whether you have a viable case.