Interest Rate Swap Claims
Major High Street lenders have been selling complex financial contracts to small and medium sized business clients without properly explaining the risks involved.
The products were offered to thousands of companies firms – including pub owners, haulage firms, property developers, architects, care-home operators and vets – when they asked their bank to take out a loan.
The customer were told that the product would provide an “insurance” or “hedge” against the risk of interest rates rising but often left businesses with large debts when the rates fell.
Upto 40,000 businesses have been sold “Interest Rate Swap Agreements” and other complicated interest rate hedging products such as “collars” or “caps and floors” without being properly told the risks they were taking.
What are the risks of these products?
The hedges were supposed to protect borrowers from the risk of interest rates going up.
But in most cases the borrowers paid more when interest rates fell. After 2008, the Bank of England slashed interest rates to help out struggling borrowers – but these customers did not benefit from cheaper interest rates because of their hedges.
What’s more, borrowers have found themselves stuck with these interest rate hedges. For example, some businesses have tried to shrink their businesses in response to the tough trading conditions, by selling off properties and using the proceeds to pay off their loans. But when they have asked to cancel the hedges for these loans, they have sometimes been told they must pay tens of thousands of pounds in cancellation costs.
Some products also contained additional risks. For example, the lender – but not the borrower – had the right to cancel the hedge without paying any compensation.
Mis-selling of Interest Rate Swaps
In many cases, borrowers say they have ended up with hedges for loans that do not even exist. In other cases, borrowers say they were pushed into taking out hedges that would last many more years than their loans, because the bank said they were likely to re-borrow the loans when they came up for repayment. But the bank made no commitment to re lend them the money. So the borrower faces the risk of being stuck in an expensive hedge for a loan the bank refuses to renew.
Interest Rate Swap lenders
There are 4 major banks that have been guilty of mis-selling these products they are:
- Barclays (includes Woolwich)
- Lloyds (includes Bank of Scotland, Halifax)
- Royal Bank of Scotland (Natwest, Ulster Bank, Sovereign Finance)
However the mis-selling probe has now widened to include the following lenders:
- Clydesdale Bank
- Yorkshire Bank
- Bank of Ireland
How to claim if you have been mis-sold?
So if you took out a interest rate swap between 2001 to 2007 please contact Claimspower. At Claimspower we can help you check if you were mis-sold your interest rate swap and help you claim back thousands of pounds in compensation.
Even if you took out the product after 2007 we can see investigate on your behalf. These products were complex and extremely difficult to understand. Most lenders failed to explain the product properly or the potential risks, so let us help you fight back.
Interest Rate Swap mis-selling claims are time restricted so contact us as soon as possible so that we can help you with your claim today. If you have been mis-sold dont let the banks get away with it.
Contact us today complete the contact us form below and one of our Interest Rate Swap claims experts will be in touch with you shortly.