Member Article

Banking consultantancy launches national recruitment drive

Due to the rapid growth in business Seneca Banking Consultants has relocated to larger offices and is to more than triple the size of its operation, recruiting 50 professionals to establish a national network of financial professionals to help manage enquires about the interest rate swap mis-selling scandal.

The company, which operates from a new base in Bolton, is already the UK market leader handling 300 claims by companies affected by the interest-rate swaps mis-selling scandal in the North West, Yorkshire and Midlands. Seneca’s caseload includes companies in property, construction, retail, hotel and leisure, and care homes.

Daniel Fallows, a director at Seneca Banking Consultants, said: “Our client base across the UK is growing and we’re keen to expand our range nationally. Businesses not covered by the review process have been resorting to litigation but there is a six-year limitation on when cases can be brought forward. There is a danger that many claims will soon be ‘time barred’, so we’re keen to reach companies before their time to seek compensation runs out.

“We believe the number and size of the claims we are handling already makes us the market leader in terms of helping business get redress but this big step up in resource will enable us to reach businesses across the UK which have been affected by the scandal. It’s crucial that businesses get the right advice to help them unravel these complex schemes and this requires a specialist eye.”

“We’re looking to recruit a team of experienced self employed or semi retired finance professionals with a good network in their respective financial communities. This will help us to reach companies which need expert advice to ensure that they are aware of the steps they can take to seek redress.”

Property consultants DTZ this week estimated that the cost to banks of the scandal could go as high as £10billion – but currently the banks have made provisions of only £2.5 billion to settle claims.

The bulk of actions concerns mis-selling of interest rate protection policies, known as swaps, collars and caps, and relate to loans taken out between 2005 and 2008. Marketed as a simple way of protecting against rises in the cost of borrowing, and often made conditional as part of a loan agreement, these interest rate hedging products were in fact highly complex financial derivatives, with significant downsides. As interest rates fell they became financially disastrous, and have been blamed for a number of company failures.

Concerns over the lack of compensation paid to businesses affected by the interest rate swaps scandal were confirmed figures from The Financial Conduct Authority last week.

The regulator said that banks have handed over just £500,000 in compensation to the companies mis-sold swaps more than a year after it set up a redress scheme.

The UK regulator announced on June 2012 that it had ‘serious concerns’ about the way these products were sold to business. Early estimates suggested at least 40,000 SME’s were affected by bank mis-selling. A subsequent pilot scheme revealed that in over 90 per cent of the 173 cases the regulator examined, mis-selling and breaches of acceptable practice had taken place.

This was posted in Bdaily's Members' News section by Simon Malia .