Member Article

Seneca reaches £1 billion interest rate swaps milestone

Merseyside firm, Seneca Banking Consultants, have reached a £1bn milestone in compensation claims managed for SMEs who were mis-sold interest rate protection.

New figures from the business showed it is now managing more than 170 claims made across the North West, Yorkshire and the Midlands worth a total of £1bn in debt.

Claims for mis-sold financial products have come from a vast range of sectors, including property, construction, retail, hotel and leisure and care homes.

After the banking scandal erupted over a year ago, the Financial Services Authority (FCA) announced that more than 40,000 businesses had been mis-sold products, and raised “serious concerns” around acceptable practice breaches within banking.

A pilot scheme then revealed that in over 90% of the 173 cases examined by FCA, malpractice had been found across big banks such as HSBC, Lloyds and the Royal Bank of Scotland (RBS).

Daniel Fallows, director at Seneca, commented: “Property companies were a major focus for the banks and that’s reflected in our case load.

“But we are acting for every kind of organisation that had a debt requirement – including a Christian charity which has been very badly affected by products its bank insisted it took out.

“The £1 billion landmark is an indicator of the scale of the problem in the North of England – not least because we believe we are one of the larger firms in terms of case load.

“But the damage caused by these products means the compensation bill could eventually be much higher. Every time one of the banks publishes financial results now the amount set aside to cover liabilities arising out of interest rate swap mis-selling just keeps getting higher.

“The most conservative estimates put the eventual cost of compensation at £3 billion – but some analysts go much higher.”

This was posted in Bdaily's Members' News section by Miranda Dobson .