McHale & Co. Solicitors Blog

FCA Extends Time Limit to Complain About Caps

"Caps", although always not right for customers are the most "friendly" type of Interest Rate Hedging Product. Rather than fixing the rate of interest, as in the case of a "Swap", the most common type of product, a customer who purchased a Cap benefited from the drop in the base rate. This means that there losses are the premium for the Cap. Although this can sometimes be large, customers were not as damaged as those who purchased a Swap.

This is why the FCA only insisted that the banks consider, through the FCA Review of hedging products, complaints only from customers who had purchased Caps and pro-actively contacted the bank themselves.

However this has lead to only 1,000 out of 7,000 customers who purchased Caps complaining to their banks. Out of the 1,000, only 100 have complained in the last 6 months.

The lack of uptake to complain by customers sold Caps has prompted the FCA to extend the deadline to complain under the FCA Review to 31 March 2015.

So, if you have been sold a Cap product, or think you might have been, please contact us on 0161 928 3848 or, to discuss.

Categories: Interest Rate Swaps

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