FCA headquarters
Some 11,000 consumers have received redress payments totalling £1.8 billion from banks in the Interest Rate Hedging Product Review Scheme.
Figures published today by the Financial Conduct Authority (FCA) showed the payments included more than £365 million to cover consequential losses,
The final date for new entrants to join the scheme will be 31 March.
In 2012, the FCA identified failings in the way that some banks sold IRHPs - derivatives which are separate to a lending arrangement for the purpose of managing interest rate fluctuations.
The FCA has asked the banks to remind eligible customers of their right to complain, and urges these customers to do so as soon as possible if they want to participate in the scheme.
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Latest redress figures – summary:
· So far the banks have sent 17,000 basic redress determinations to customers, 14,000 of which include a cash redress offer, and 3,000 confirm that the IRHP sale complied with our rules or that the customer suffered no loss.
· To date, around 11,000 customers have accepted a redress offer and £1.8 billion is being paid out, including more than £365 million to cover consequential losses.
· This means that, so far, 80% of offers have been accepted. For those banks who got their letters out earlier, the acceptance rates are around 90%.
In a statement, the FCA said: "The nine banks in the scheme sought to identify all eligible customers who were sold swaps, structured collars or simple collars and invited them to join the review.
"Of the 18,000 customers in this category, 16,000 chose to join the review, and 2,000 chose not to participate. All claims made in this category have now been determined and offers of basic redress made as appropriate.
"A further 7,000 customers who purchased cap products were contacted by the banks and advised that these sales would only be included in the review if they proactively complained. So far only 1,000 of them have done so.
"We have asked the banks to write again to all of the relevant customers to remind them of their right to complain."
Customers will still be complain about the sale of their IRHPs to their bank after the scheme closes to new entrants on 31 March. They may also be able to refer their complaint to the Financial Ombudsman Service, or, subject to time limits, be able to pursue their complaint through the courts.
