A year after regulators ruled that banks were guilty of widespread mis-selling of £2 bn of interest rate ‘swaps', thousands of the small and medium-sized businesses affected are still waiting to receive compensation.
Swaps are insurance policies designed to protect against changes to interest rates and were sold by banks to firms taking out loans.
In June of last year the Financial Services Authority found that more than 90% of firms taking part in a review had been mis-sold such policies. Some were left with huge bills as a result of schemes which forced them to pay more when interest rates fell, the Mail on Sunday reports.
This January, the FSA announced a compensation scheme through which the 40,000 firms affected should receive ‘immediate' compensation. But it is understood only a small number have even received offers from banks.
Campaign group Bullybanks, which represents more than 1,000 firms involved, accused the banks of ‘dragging their feet'.
None of its members have received compensation, while just ‘a handful' have received written offers.
Jeremy Roe, chairman of Bullybanks, said: ‘Instead of coming out with a simple assessment of mis-selling, the vetting procedures are too complex and are causing long delays.'
While assessing what a firm paid for a swap is straightforward, assessing losses incurred as a result is harder. But under the rules of the FSA's successor, the Financial Conduct Authority, both factors must be assessed as a single claim before any payment can be paid.
Roe said: ‘We believe the banks should begin paying for mis-selling now. The speed at which redress is being identified is a scandal.'
Bullybanks is supported by Guto Bebb MP, chairman of the All Party Parliamentary Group on interest rate agreement mis-selling, who said the delay was ‘bad news for the businesses affected and for the UK economy'.
The group claims more than 400,000 jobs have been lost due to swaps mis-selling, with the Treasury losing £1.7 bn a year in revenue.
Overall the main banks have set aside more than £2 bn to settle claims and they maintain they are doing all they can.
But for the banks to make redress, they must first receive approval from the FCA. HSBC received this in February, while Barclays and Lloyds are believed to have received approval in April.
A spokesman for the FCA said: ‘We appreciate customers want progress, however it was important we got the right system in place.'
The British Bankers' Association said: ‘Each bank's priority is that the correct outcome is reached for all customers as soon as possible.'
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