March 5, 2014 / 10:02 AM / 4 years ago

Britain's banks pay out $804 million for swaps mis-selling

LONDON, March 5 (Reuters) - Britain’s biggest banks have so far paid out 482 million pounds ($804 million) from around 4 billion set aside to compensate small firms mis-sold complex interest rate hedging products, the financial regulator said.

The Financial Conduct Authority on Wednesday urged small firms that have not yet joined a compensation scheme to do so, saying that the banks’ offer to pay 8 percent annual interest on top of compensation was a “fair alternative” to them putting together claims for consequential losses.

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.

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