Mis-sold or mis-managed Interest Rate Swap?

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Is This You?

  • Were you or your business sold an interest rate swap or other similar product on a mortgage or loan without the risks being fully explained?
  • Have your loan repayments been significantly higher than you were originally led to believe due to the selling of an interest rate swap or other similar product?
  • Have you been quoted or charged excessive fees to exit an interest rate hedging agreement early?
  • Are you dissatisfied with the level of redress already offered by your bank or lender for the mis-selling of an interest rate swap or other similar product?
You have made making a claim so easy and stress free. I am delighted with my pay out! Mr Smith

Who Are We?

We are an award-winning team of solicitors who specialise in professional negligence and financial mis-selling claims. We use our many years of experience and knowledge in this area to obtain and scrutinize relevant documents from financial advisers, stockbrokers, CFD providers and other associated entities.  Using our specialist knowledge of the law of contract and negligence we identify any grounds for action. We submit written complaints, detailing every allegation and are successful in most of our cases.

How Much Am I Entitled To?

Interest rate hedging products are complex financial instruments which can affect the amount repaid under loan agreements. The level of losses suffered can be very significant. A borrower can find themselves in a situation whereby they are paying excessive amounts of interest. The charges to exit such an agreement early can in some instances run to several hundred thousand pounds.

If you can successfully show that a bank or other financial institution mis-sold an interest rate hedging product to you, then you can seek to recover an amount of compensation that puts you in the position that you would have been in had no wrong been done.

Neglect Assist can investigate the level of loss suffered and can advise you on the appropriate level of redress that you may be entitled to…

Neglect Assist can investigate the level of loss suffered and can advise you on the appropriate level of redress that you may be entitled to. We may be able to act for you under a No Win No Fee agreement to recover these losses.

Following a recent review by the Financial Conduct Authority on the sale of interest rate hedging products, some affected businesses and individuals have received offers of compensation from their lender.

In some instances, these offers of compensation do not adequately reflect and cover the losses that have been suffered. In particular, such offers do not always properly include payments to reflect lost opportunities (known as consequential losses).

It is important to appreciate that the acceptance of an offer of settlement is usually deemed to be legally binding. It is therefore of vital importance that any offer adequately compensates you for all forms of losses suffered. If you have received an offer of redress which you feel is inappropriate, then please contact us for further advice.

The extent of a potential claim is illustrated by the following examples;

Mr D runs a care home and approached his bank for a loan to purchase the freehold of the property. He was advised to take an interest rate swap and was told this would protect him against future rises in interest rates. The Bank of England base rate subsequently fell to 0.5% but Mr D received no benefit as a result of this reduction. He enquires about exiting the interest rate swap so that he can reduce his monthly loan repayments by several thousand pounds each month. He is quoted a fee of over£170,000 to exit the agreement.

 

 

Mr & Mrs A run a golf course and spa hotel. They have a £5million-turnover business and about 200 staff. In 2007 their profits fell, and this breached the terms of a £5.5million loan. Their bank demanded they take out an interest rate swap. When  rates fell, the swap cost them dear and so far they have paid £750,000 in interest. When they tried to end the contract early,  they were told it would cost £450,000.

What Do We Charge?

We offer an absolute and guaranteed No Win, No Fee agreement, it’s that simple. If successful, we take a fee of up to 20% (plus 4% VAT) * Of the award of compensation. If unsuccessful, our clients pay us nothing.

* We reserve the right to apply a deduction in more complex or higher risk cases of up to 30% plus VAT. Typical examples might be where there are multiple parties to claim against, where time limits for claiming may have passed or new areas of law are tested.

About Claims For Mis-Sold Interest Rate Swaps & Other Similar Products

From as early as 2001, banks and other financial institutions started selling complex interest rate hedging products to businesses and individuals seeking loans. They were most commonly, and most aggressively, sold between the period of 2005 and 2008.

There are many different types and forms of interest rate hedging products including;

  • Interest rate swaps
  • Dual rate swaps
  • LIBOR swaps
  • Interest rate collars
  • Structured collars
  • Tailored business loans
  • and many more

These are products which affect the level of interest paid on the loan. While each individual product works in a different way, at its basic level the lender would effectively offer the customer the opportunity to fix the base rate on a loan at a certain level, and in theory this would protect the customer against future increases in interest rates.

In reality, these products carried substantial risks which were not always adequately explained before the loan agreement was entered into. Following significant reductions in Bank of England base rates, many customers who had been sold an interest rate swap or other similar product received no benefit as they may have done under alternative agreements. They were then left paying high and excessive monthly repayments under the terms of the loan agreement.

In some cases, a fall in interest rates would in fact see the borrower facing increased costs and the level of both monthly repayments and amount paid over the duration of the loan agreement would be higher as a result.

The customer would be quoted extortionate fees if they wanted to exit the agreement early and this resulted in many individuals and businesses being effectively locked into the agreement. However, in many cases the lender would insert terms and conditions into the loan agreement which allowed them to cancel the agreement early if it wasn’t proving to be working in their best interests.

Many customers who were sold an interest rate swap product did not fully understand what they were agreeing to. On some occasions, customers were led to believe that it was a compulsory condition of the loan that an interest rate swap arrangement be entered into.

Banks and other financial institutions made significant profits from the sale of interest rate swaps, while many small businesses and individuals have lost hundreds of thousands of pounds.

Financial Conduct Authority Review

The Financial Conduct Authority, as the industry regulator, undertook a comprehensive review into the way that Interest Rate Hedging Products were sold. In the summer of 2012, they stated that banks and other financial institutions must review all sales of interest rate swaps and other similar products made since December 2001. If the sale is deemed to be unfair, then redress must be offered.

This has resulted in some businesses and individuals receiving offers of compensation. In some instances, these offers of compensation do not adequately reflect and cover the losses that have been suffered. In particular, such offers do not always properly include payments to reflect lost opportunities (known as consequential losses).

 

If the sale is deemed to be unfair, then redress must be offered…

 

If you have received an offer of redress which you feel is inappropriate, then please contact us for further advice as we may be able to represent you in further action. It is important to appreciate that the acceptance of an offer of settlement is usually deemed to be legally binding. It is therefore of vital importance that your offer adequately compensates you for all forms of losses suffered. Neglect Assist can investigate the extent of your potential claim and advise you as the correct and appropriate level of compensation.

If you believe that a bank or financial institution, when selling an interest rate hedging product has;

  • Failed to fully explain the risks and costs involved
  • Applied unfair or excessive early exit fees
  • Caused you to unfairly incur higher levels of repayments and other charges on a loan
  • Caused you to miss business opportunities due to financial pressures caused by the agreement

or acted negligently in any other way, then please telephone for free, without obligation advice. Alternatively, please fill in the short enquiry form on the right and we’ll call you back.

FAQs

What is an interest rate hedging product?

These are complex financial instruments which affect the level of interest paid on a mortgage or loan. They were commonly sold to small – medium businesses from between 2001 and 2008. They can take many different forms and are known by several different names. Some of the more common include interest rate swaps, interest rate collars and LIBOR swaps.

If you believe that you may have been affected by such a sale, then please contact us for free, no obligation advice.

Are there any banks you do not consider taking action against?

No. We are completely independent and able to offer advice and consider action against any bank or financial institution.

How much am I entitled to?

If you can successfully show that a bank or other financial institution mis-sold an interest rate hedging product to you, then you can seek to recover an amount of compensation that puts you in the position that you would have been in had no wrong been done.

Any settlement is ordinarily taken to be legally binding and if you have received an offer of settlement from your bank already, it may be in your interests to seek advice as to whether this adequately addresses your losses.

Neglect Assist can investigate the level of loss suffered and advise you on the level of redress that you may be entitled to. We may be able to act for you under a No Win No Fee agreement to recover these losses.

What do we charge?

We offer an absolute and guaranteed No Win, No Fee agreement, it’s that simple. If successful, we take a fee of up to 20% (plus 4% VAT) * Of the award of compensation. If unsuccessful, our clients pay us nothing.

* We reserve the right to apply a deduction in more complex or higher risk cases of up to 30% plus VAT. Typical examples might be where there are multiple parties to claim against, where time limits for claiming may have passed or new areas of law are tested.

What if my claim has already been rejected?

We will still look at this for you. We have taken on claims that have previously been rejected by banks and financial institutions.

Will I have to fill out loads of paperwork?

No, we will be able to do most of the necessary paperwork for you and we can obtain any relevant documents from the lender or any other connected parties on your behalf. You will have to check the details of your claim before it is submitted, but we will assist you with this.

What do I do now?

There is absolutely no obligation to proceed and if you tell us what’s happened, we will briefly explain if we think you have a claim and the procedure for filing a claim and the time limits that apply.

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