Interest rate swaps

Thursday, 05 July 2012 01:00

Interest rate swap agreements (also known as 'hedging agreements') have been much in the news recently and many clients will wonder whether they may have a claim against their bank for mis-selling. The impact of interest rate swaps has been huge, with many (especially small) businesses pushed to the verge of insolvency and left unable to deal effectively with their assets.

Barclays, Lloyds, HSBC and RBS have all admitted to mis-selling interest rate swaps after the FSA found "serious failings" in the way they have been marketed to some investors.

Typical problems include:

- not realising the impact which falling interest rates would have

- being forced to commit to terms longer than the original borrowing agreement

- substantial 'break' fees

- consequent difficulty refinancing

If you have experienced these difficulties, you may have a claim.

The big four banks have agreed to compensate potentially thousands of customers and the sums involved are substantial – we have already been successfully involved with cases which are now being resolved. We have seen recovery of substantially in excess of £100,000 - larger claims will inevitably be made.

Indications have been given by the banks that they will treat complaints fairly but it will be important to ensure that complaints are effectively presented and pursued. Our experience is that such agreements are often complicated and much will depend on the circumstances of each case and what you were told at the time. Not every interest rate swap will have been missold and there may be issues – banks will not be keen to repay substantial sums. If you think you may have a claim and need someone to fight your corner, 'phone us today and we can talk you through your options.

For further advice please contact our specialists Stephen Jennings, Jill Headford, Tony Beard, Richard Thorneycroft or Tracey Bridgwater at Tozers on 01392 207020 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .