The banks in question have sent 15,000 redress determinations to customers.
The FCA has announced that £1.1 billion of redress payable to customers has been paid out by the banks to cover interest rate hedging products (IRHPs).
In 2012, the FCA identified failings in the way that some banks sold IRHPs. The banks involved agreed to review their sales of IRHPs made to unsophisticated customers since 2001.
Within that review, was an investigation into “serious failings” in the sale of many of these products to small and medium sized businesses (SMEs).
So far, all nine banks have now completed sales reviews of customers who joined the review before March 2014.
AIB, Bank of Ireland, Co-op, HSBC, Lloyds, Santander, and Clydesdale and Yorkshire Banks have met the FCA’s target by delivering redress letters to all but a handful of these customers by the end of May, within 12 months of starting their reviews. Barclays and RBS will send out redress letters to the remaining customers (around 500 customers between them relating to 700 sales) before the end of June.
The banks have now sent 15,000 redress determinations to customers, 13,000 of which include a cash redress offer and 2,000 confirm that the IRHP sale complied with FCA rules or that the customer suffered no loss.
To date, 7,000 customers have accepted a redress offer and £1.1 billion is being paid out.
In addition to the £1.1 billion of redress payable to customers, the banks have set aside money to cover the costs of having to get out of these products (the payments customers would have made in the future), the costs of employing more than 3,000 people to carry out the exercise, and the costs of engaging independent reviewers to look at every case.
Leave a comment