In the last few days, the big four banks, Barclays, Natwest, Lloyds and HSBC have admitted to mis-selling interest rate swaps to small and medium sized businesses.
An interest rate swap enables the banks to exchange fixed rate interest for variable rate interest over a set period of time. A company typically uses interest rate swaps to limit or manage exposure to fluctuations in interest rates.
In essence, banks offered businesses the opportunity to fix the base rate on a loan at a certain level, to ensure that the company’s borrowing costs did not rise to a level that it could not afford. The problem with this is that it could cost the business if the interest rates fell, which they subsequently did.
One particular area of mis-sold interest rate swaps is that the banks did not inform the customers of the cost of exiting the swap, should the customer wish to terminate the agreement.
As a result of the mis-sold interest rate swaps, the banks have agreed to compensate victims of it.
If you think that you may have a claim for interest rate swap mis-selling, contact Rob Miller on 0845 223 4700 or chat online.
We are able to assess whether you have a claim, help quantify it, and using our experienced legal team, help you make a claim.
For more information, e-mail [email protected]