Interest rate mis-selling claims – helping your bank to help you in the FSA review
The intention of the FSA initiated bank review of the mis-selling of an interest rate hedging product (“IRHP”) to a qualifying customer is that they are identified and reviewed fairly with little or no additional burden being placed on the customer. However, adopting the Scout movement’s approach of “be prepared” is a must for a business going through the review. To achieve the best possible outcome a business should:
- Collate all the relevant documents, including brochures or illustrations provided by the bank before the IRHP was taken out, and any other records of advice given by the bank;
- Collate financial information to show what payments have been made under the IRHP, and what losses suffered as a result of the IRHP;
- Prepare a chronology and detailed statement of dealings with the bank in relation to the IRHP and any associated loans;
- Preserve all documents (whether held in paper form or electronic or on smart phones or pc’s at home etc) that may contain evidence relevant to your claim.
Why being prepared is going to help you?
Patiently waiting for the review of your IRHP by the bank, and then responding on an ad hoc basis to any questions asked by the bank is unlikely to produce the best outcome for you. Banks have until recently arguably enjoyed a solid reputation, being trusted implicitly by their customers for safe, sound advice. There is now a burgeoning distrust of banks, largely brought about by well-publicised failures and regulatory breaches by the banks in recent years, with the mis-selling of IRHPs being the latest failure to hit the headlines.
However, despite the mis-selling of IRHPs, many businesses still have sufficient trust in the banking system and its regulation to blithely expect fair play and openness will come to the fore to protect and recompense them for wrongly sold IRHPs. That is the intention behind the FSA review, but a customer should be prepared to fight hard. The bank is not going to give recompense without a compelling case being put to it. If the bank considers a customer wouldn’t win if it went to court, the customer is unlikely to succeed in the review. Moreover, it is unlikely that the bank’s file will evidence much of the “sales puff” that was given in meetings or over the telephone so this needs to be set out in a statement to assist the reviewer.
As part of the review, the bank is likely to ask you to attend a meeting. It’s unlikely to be a cosy chat with your usual business manager but a formal meeting with a manager who is an expert in IRHPs. The bank will commonly be accompanied by its specialist solicitor. This takes many customers by surprise, as they do not anticipate such an inquisitorial encounter. A customer is entitled to take his own solicitor to the review meeting, who will be able to deal with the complex issues that may arise in proving consequential losses sustained by the customer.
The prospect of thorough preparation for the review can be daunting. Lamport Bassitt assist clients in preparing for the review by setting out their best case, identifying breaches by the bank of regulatory guidelines and preparing detailed cogent evidence to support the case. Our fees can be paid on a “pay as you go” basis, dealing with separate aspects as they arise. Alternatively, in an appropriate case Lamport Bassitt is willing to act on a contingency basis, with our fees only becoming payable in the event that the review finds in your favour. Check to see whether you have legal expenses insurance which provides you with cover.
Being thoroughly prepared for a review, and being pro-active during it, is the key to achieving the best possible outcome.
To discuss an IRHP you may have, and how to fund obtaining professional advice on it, you can call Lamport Bassitt Solicitors on 023 8083 7775 or email on email@example.com. Visit the website for more information and for helpful FAQs.