Partner Article

Companies urged to review mis-sold hedging rate products

A leading Midlands insolvency firm is urging business owners to put forward a claim for compensation for mis-sold Interest Rate Hedging Products before it’s too late.

Poppleton & Appleby, which has offices in Birmingham and Coventry, is calling for companies to act fast as the statutory six-year limitation period for making a claim may shortly be expiring.

Interest Rate Hedging Products (IRHP), also referred to as swaps, caps, collars or fixed rate tailored business loans, were widely sold by banks from December 2001 to unsuspecting individuals, partnerships and companies in the expectation that interest rates would rise.

With the dramatic fall in interest rates in 2008/9 from five per cent to 0.5 per cent, thousands of borrowers found themselves required to pay interest rates that might be ten times the market rate.

The Financial Conduct Authority (FCA) has since found that over 90 per cent of IRHPs were mis-sold and estimate that there are up to 100,000 companies who fall outside the compensation scheme, set up by the banks, under the supervision of the FCA, to determine whether compensation should be made available to customers.

Poppleton & Appleby is at the forefront in assisting business owners, the accountancy profession and its clients in obtaining compensation and has recently secured a number of settlements against high street banks for the mis-selling of IRHPs.

Martin Coyne, who is a partner at the firm, said: “The claims arose on insolvency assignments being handled by Poppleton & Appleby across a range of businesses, all based in the Midlands area.

“The claims are complex and have taken some time to reach a conclusion, but I am pleased to announce that in the last two months, we have received cash settlements from high street banks including £83,000 for a former firm of solicitors together with £51,000 for a nightclub business and £48,000 for a former building company.

“We have also acted for a specialist horticultural business which was not in an insolvency process, but had heard about the success we were having and asked for our assistance. The client was delighted to receive a settlement of £285,000.

“We have three further claims that are anticipated to settle in the next few months and we expect total recoveries for clients to exceed £700,000.

“We would urge all business owners to review their banking arrangements since December 2001. There are many more claims out there yet to be made and there is a limited time remaining in which claims against banks can be started.”

This was posted in Bdaily's Members' News section by Matt Joyce .