North West business among worst hit by interest rate swap mis-selling

Small and medium businesses in the North West are amongst the most seriously hit by mis-selling of interest rate swaps, according to new figures.

Figures from Manchester law firm, Berg, show that from more than 40,000 firms which have been mis-sold swap products, 33% of victims currently pursuing claims are based in the North West.

Despite the number of businesses affected, many might still lose out or are yet to respond to the review. The FCA has set a deadline of May 2014 for banks to offer redress to businesses, so time is of the essence, yet Berg has reported many other problems with the process for North West businesses.

One of the common errors is to treat the bank’s invitation to the FCA review process too informally, with businesses not understanding that the bank will take anything said at the fact finding stage as their ‘testimony’ for further use in court proceedings.

Many are unaware that there is a strict six year limitation date for bringing a claim in the civil courts. This may be the only route to securing proper compensation if a business doesn’t meet the eligibility criteria to participate in the FCA review or if the compensation offered by the bank in the review process is inadequate.

Alison Loveday, managing partner at Berg, said: “Pursuing a mis-selling claim is a complex process, nothing like seeking PPI compensation.

“The outcome of an FCA review claim can hang on the tiniest of details, yet many businesses are still unaware of the fact they only have one chance to get it right. This is very a bank-led process and there is no formal right of appeal. Business owners should be aware that simply lodging a complaint with the bank will not stop the clock running.”

Lucy Powell, MP for Manchester Central, added: “The mis-selling of interest rate swaps has seriously impacted hundreds of businesses in the North West and my constituency here in Manchester. Some have had to reduce their growth and some have even closed down.

“The banks still appear to be holding the power in this situation, and this must change. Whilst it’s encouraging to see that lots of the region’s businesses are taking action to recover the losses they have incurred, I’d urge them to seek the necessary advice they need to put themselves in the best position for pursuing a claim.”

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