Interest rate swap (IRS) - a contractual agreement set up by two parties where the upcoming interest payments are exchanged for a specified fixed rate of interest.
It has come to light that this product has been mis-sold to organisations as part of business loans, with high street banks failing to inform businesses of the risks involved in consenting to the hedge agreement, leading to interest rate swap mis-selling.
Interest rate swaps are sold to protect businesses against fluctuations in interest rates, saving them from high repayments so that they have an opportunity to manage their finances more effectively.
However, the product does come with a number of risks, and financial institutions are responsible for explaining these to the client prior to setting up a contractual agreement , making sure that they fully understand the hedging product and checking that it is completely suitable for the business. To comply with regulatory requirements, a bank must make customers aware of the potential IRS risks:
Following the substantial changes that have taken place in the financial climate, businesses are discovering that they are facing larger repayments and problematic early termination procedures after having interest rate swap deals pushed upon them, without being fully informed of the downfalls.
Linder Myers has solicitors, partners and associates who have extensive knowledge on interest rate swaps and a thorough understanding of the contractual law breaches that can occur during the process.
We also support a wide range of businesses during the complex process of claiming for IRS mis-selling. Our team can provide you with a full understanding of your position and the possible claim you can bring against a bank, working hard to establish the strongest possible case.
Source: http://www.lindermyers.co.uk/interest-rate-swap-information
It has come to light that this product has been mis-sold to organisations as part of business loans, with high street banks failing to inform businesses of the risks involved in consenting to the hedge agreement, leading to interest rate swap mis-selling.
Were you informed of the risks?
Interest rate swaps are sold to protect businesses against fluctuations in interest rates, saving them from high repayments so that they have an opportunity to manage their finances more effectively.
However, the product does come with a number of risks, and financial institutions are responsible for explaining these to the client prior to setting up a contractual agreement , making sure that they fully understand the hedging product and checking that it is completely suitable for the business. To comply with regulatory requirements, a bank must make customers aware of the potential IRS risks:
- Larger payments following interest rates falling
- Complex exit procedures
- Significant exit and cancellation fees
Following the substantial changes that have taken place in the financial climate, businesses are discovering that they are facing larger repayments and problematic early termination procedures after having interest rate swap deals pushed upon them, without being fully informed of the downfalls.
Helping businesses mis-sold IRS
Linder Myers has solicitors, partners and associates who have extensive knowledge on interest rate swaps and a thorough understanding of the contractual law breaches that can occur during the process.
We also support a wide range of businesses during the complex process of claiming for IRS mis-selling. Our team can provide you with a full understanding of your position and the possible claim you can bring against a bank, working hard to establish the strongest possible case.
Source: http://www.lindermyers.co.uk/interest-rate-swap-information
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