Manchester law firm Berg criticises banking for SME’s in the region

Manchester law firm Berg has launched a new report into SME banking, aiming to shed light on the fact many major banks are continuing to make business conditions difficult for many small and medium sized businesses in the region.

The report, published today, comes two years after the Financial Conduct Authority (FCA) identified failings in the way that some banks sold interest hedging products such as swaps. It has been pulled together using evidence from more than 300 cases from businesses represented by the firm.

The banks involved agreed to review their sales of IRHPs made to certain customers since 2001. £1,1 billion has been paid out to 6,726 customers through the FCA review scheme, yet Berg has evidence that banks are now acting aggressively in delivering the redress, through overdraft changes and unsuitable alternative products.

This has led to many businesses seeking litigation, which the FCA’s review sought to avoid.

Alison Loveday, managing partner at Berg, said: “The report into SME banking has been published because we have found that not only has the FCA process been unsuitable for many of our region’s businesses, but that here and across the UK, it is ‘business as usual’ for many banks in the way they are dealing with SMEs.

“This includes the mis-use of personal guarantees, the recommending of unsuitable lending arrangements, and aggressive attempts to claw back redress costs from the FCA review.

“We have been working with local MPs and businesses to write the report, and I hope it will help draw people’s attention to the fact that a new wave of SME lending malpractice cannot be allowed to happen.”

To download the report please visit https://www.berg.co.uk/banking-report-2014.aspx

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