February 4, 2014 / 7:21 AM / 4 years ago

Britain's banks pay out $500 million for swaps mis-selling

LONDON, Feb 4 (Reuters) - Britain’s biggest banks have so far paid out only 306.3 million pounds ($500.3 million) from more than 3 billion pounds which 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 Tuesday that the pace of banks reviewing cases of mis-selling was continuing to increase. A total of 2,092 offers of compensation had been accepted by customers at the end of January, up from 1,040 at the end of December.

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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