LONDON, Jan 10 (Reuters) - Britain’s biggest banks have so far paid out only 158.6 million pounds ($261.1 million) of the 3 billion pounds they have set aside to compensate small firms mis-sold complex interest rate hedging products, the financial regulator said.
The Financial Conduct Authority said on Friday that the pace of banks reviewing cases of mis-selling was continuing to increase. A total of 1,040 offers of compensation had been accepted by customers at the end of December, up from 547 at the end of November. The amount of compensation paid had risen from 81.2 million pounds at the end of November.
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 penalties to get out of the deals, which many said they had not been told about.