Dispute Resolution & Commercial Litigation

Interest Rates / Swaps / IRSA Misselling

The Financial Services Authority (FSA) - which has since been replaced by the Financial Conduct Authority - recently reported that small and medium sized businesses have been mis-sold interest-rate hedging products. These products were sold alongside loans to purportedly protect businesses from fluctuations in interest rates, which could affect their loan repayments.

There are broadly four types of the products:

  • swaps
  • caps
  • collars
  • structured collars

The majority of the products were sold between 2005 and 2008, although they were sold before and after this.

Complex products

The products are, by their nature, complex. It is therefore common for a business not to be aware which product, if any, they have been sold. However, the products can lead to a significant increase in loan repayments as they rely on a degree of speculation as to interest rates, which can affect the loan. The FSA found that major retail banks, including Barclays, HSBC, Lloyds and RBS, had poor sales methods. They did not fully inform businesses regarding the benefits and risks of the products, nor assess if the products were suitable for the business' circumstances, but advised on products when they were not authorised to and financially rewarded employees for selling the products, which may have skewed their judgment.

How we can help

At McHale and Co we have experience in advising and recovering monies for business clients regarding potential claims against the banks to recover monies lost as a result of being mis-sold an interest rate swap product.

To discuss your loan and interest rate swap product, please contact us. Give us a call on 0161 928 3848 or complete our online contact form