Q: My bank says I don’t need professional advice about my interest-rate swap claim - they will provide redress. Is this the case?
Banks will fight claims all the way and I don’t think anyone will find it easy. In general, avoidance of liability is a huge problem and even now, we see communications from banks to customers which are misleading.
To suggest, for instance, that people don’t need specialist advice is disingenuous and, frankly, ludicrous. These products are in reality complex, financial derivatives, with hedging arrangements often tucked away inside the detail of ‘structured’ products.
A couple of the banks have some really nasty structured products - as business secretary Vince Cable recently pointed out. What’s required is an experienced and specialist eye to unravel what has been sold and the breaches of acceptable practice. It’s not a job for a lay person or even an inexperienced lawyer. A high number of the cases we are dealing with are referred to us by accountants and general practice law firms.
The banks have consistently downplayed the issue but the depth of the problem for small and medium sized businesses is there for all to see. In our view, across the 11 banks which led the mis-selling, there are claims worth about £20b. Sky News has estimated that the average claim size of £500,000 – which think that’s actually a little low.
The destructive effects of these policies have manifested themselves in a variety of ways. These include administrations and outright company failures, plus a whole spectrum of problems such as redundancy and restricted cash flows. In some cases it has proved a deal-breaker where a principal wants to sell the business but is unable to do so because of the existence of the swap.
In others, it’s forced people to sell up completely or to dispose of assets at below market rates to fund the astronomical fees associated with exiting these hedges. It’s also responsible for personal loss – severe stress, marriage failures, having to withdraw children from fee-paying schools.
All answers are for general guidance only. Each case must be handled on the individual facts.
Source: http://www.insidermedia.com/insider/yorkshire/88752-ask-expert-interest-rate-swap-mis-selling
Banks will fight claims all the way and I don’t think anyone will find it easy. In general, avoidance of liability is a huge problem and even now, we see communications from banks to customers which are misleading.
To suggest, for instance, that people don’t need specialist advice is disingenuous and, frankly, ludicrous. These products are in reality complex, financial derivatives, with hedging arrangements often tucked away inside the detail of ‘structured’ products.
A couple of the banks have some really nasty structured products - as business secretary Vince Cable recently pointed out. What’s required is an experienced and specialist eye to unravel what has been sold and the breaches of acceptable practice. It’s not a job for a lay person or even an inexperienced lawyer. A high number of the cases we are dealing with are referred to us by accountants and general practice law firms.
The banks have consistently downplayed the issue but the depth of the problem for small and medium sized businesses is there for all to see. In our view, across the 11 banks which led the mis-selling, there are claims worth about £20b. Sky News has estimated that the average claim size of £500,000 – which think that’s actually a little low.
The destructive effects of these policies have manifested themselves in a variety of ways. These include administrations and outright company failures, plus a whole spectrum of problems such as redundancy and restricted cash flows. In some cases it has proved a deal-breaker where a principal wants to sell the business but is unable to do so because of the existence of the swap.
In others, it’s forced people to sell up completely or to dispose of assets at below market rates to fund the astronomical fees associated with exiting these hedges. It’s also responsible for personal loss – severe stress, marriage failures, having to withdraw children from fee-paying schools.
All answers are for general guidance only. Each case must be handled on the individual facts.
Source: http://www.insidermedia.com/insider/yorkshire/88752-ask-expert-interest-rate-swap-mis-selling
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