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 its exposure to fluctuations in interest rates.
In essence, from around 2005 banks offered interest rate swaps to operate along side a business’s existing variable rate loan.
They were sometimes sold on the basis that it would limit the business’s risk of interest rate swaps rising and in many cases it was stipulated that a swap deal had to be entered into to obtain the finance.
All the major banks have accepted that these products were missold and have agreed with the FSA to provide redress to businesses based on an independent review.
Given the complexity of this issue, if you think that you may have a claim for a missold interest rate swap, we would recommend that you seek for advice on how to take it forward.
For further information, contact Rob Miller