FSB demands action from the banks

Date: 
26 Jan 2013
Details: 

...to compensate thousands of small businesses caught up in swaps mis-selling

The Federation of Small Businesses (FSB) has said that the banks need to take
swift and decisive action to compensate the businesses caught up in the mis-selling
scandal, after the Financial Services Authority (FSA) reported that 90 per cent of these
complex products were mis-sold.

The FSB is pleased that the FSA has listened to its concerns and has broadened the
sophistication criteria so that small firms will not be locked out of the redress scheme.
However, it is concerned that all payments haven’t been automatically suspended and
that there is still not a clear route for a business to appeal against a decision.

John Walker, National Chairman, Federation of Small Businesses, said:

“The FSA’s report into mis-selling highlights the seriousness of the situation, finding
that 90 per cent of loans were mis-sold. This is alarming but will come as a relief to the
thousands of small firms who have been anxiously waiting for an outcome on this very
complex situation. We welcome the work that the FSA has done to date and that it has
listened to our concerns about how it defines a sophisticated business.

“However, with the pilot showing such a significant level of mis-selling we are
concerned that the FSA has not ruled that all payments should be suspended when a
firm enters into the scheme – we would like the banks to do this for their customers.
There is also a lack of clarity on what full redress looks like, as banks are determining
what constitutes consequential loss and how an appeals process will work.

“What is clear is that firms will need expert support when they enter the scheme to
ensure they receive the redress they deserve. Now the pressure is on the banks to
contact its customers. They must do so quickly and decisively to draw a line under
this matter and bring the situation to a close. This review only covers the first four
banks, with the report into the remaining seven due in the coming weeks. The FSB will
continue to fight for other firms caught up in this scandal.”

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