Banks slammed over ‘slow’ swap redress scheme

Business leaders have attacked the “painfully slow” progress being made by lenders in compensating firms that were mis-sold complex financial products.

The Financial Conduct Authority (FCA) said just ten customers have agreed compensation deals, totalling £500,000, since it launched a full review over the selling of interest rate swap products in May.

John Allan, national chairman of the Federation of Small Businesses, described the figures as “disappointing” and said the organisation was losing confidence in banks and the FCA.

He said: “The regulator initially indicated the redress scheme would take six months to complete – a timetable that has clearly been missed by a large margin.”

Banks have identified more than 30,000 cases of potential interest rate swap mis-selling since the end of 2001 and the FCA said around 85 per cent of sales are being reviewed. Royal Bank of Scotland has the highest number of cases under review – 10,528 – but has offered redress to only 20 customers. Barclays is reviewing 3,436 cases and has made 92 offers of compensation.

The FCA expects most customers to be told the result of their claims by the end of the year. Lenders have taken on 2,800 staff to work through the claims and have so far reviewed more than five million documents.

Anthony Browne, chief executive of the British Bankers’ Association, said: “Banks are working hard to ensure that the process, which began four months ago, is completed as quickly as possible.”