UK watchdog says rate swaps compensation payments started
LONDON, Sept 4
LONDON, Sept 4 (Reuters) - Britain's markets watchdog said banks have started paying compensation for mis-selling of interest rate swaps and the bill is expected to increase rapidly over coming months.
The products were designed to protect smaller companies against rising interest rates but when rates fell, they had to pay large bills, typically running to tens of thousands of pounds. Companies also faced penalities to get out of the deals, which many said they had not been told about.
The Financial Conduct Authority said in a statement on Wednesday that by the end of August 10 offers of redress had been accepted by businesses totalling 500,000 pounds.
This figure is expected to increase rapidly over the coming months with 2010 offers already sent out to customers with a further 1,700 offers due to be sent shortly, the FCA said.
"Due to their complicated nature, redress offers to customers making a claim for certain consequential losses, may take longer," the FCA added.
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