Paul Miles Rogers of the Federation of Small Businesses (FSB) reports on the latest news about another example of a bank mis-selling products.
This month it was reported that Royal Bank of Scotland (RBS) had mis-sold loans to business customers under the Enterprise Finance Guarantee (EFG) scheme; quoting John Allan, National Chairman of the FSB, he said: “We are deeply disappointed that yet another example of a bank mis-selling to businesses has come to light. It is completely unacceptable for firms to be misled in this way. This news involving RBS will damage further the already poor levels of trust between businesses and the banking industry.”
John went on to say: “What is important now is that we find out the full story behind what happened at RBS and why. We need to know who has been affected and make sure they get full and timely compensation. This process must be swift, comprehensive and independently verified.”
The concern is that the compensation process can be long and drawn out. Back in 2012 it came to light that banks had mis-sold to businesses insurance products to ‘hedge’ against interest rate rises. These have become known as SWAPs. But as we all know interest rates fell to 0.5% and the banks charged penalties which amounted often to thousands of pounds. At the time it was thought that 60,000 businesses could make SWAP rate claims against the banks for the charges incurred. The FSB set up advice for its members and we have seen our members achieve successful compensation claims.
Our advice is to seek advice, as businesses continue to be put under undue strain by such events. As the recovery from recession continues businesses and jobs remain at risk. Some have already failed due to the pressure. As the compensation process can take a long time this adds a further burden on affected businesses.
The FSB also wants more to be done to ensure customers who in the future choose a bank advised product, are clear on what they are purchasing so that they are making a fully informed choice.
A blog post has been written to provide useful information to signpost businesses to the appropriate advice which can be viewed on our monthly networking meeting site www.rugbybreakfast.wordpress.com/.