Interest Rate Swaps - Mis-selling

At the end of June 2012 the FSA released a summary of its findings following its investigation into Interest Rate Swap Mis-selling.

The FSA's conclusions are that:

• There was poor disclosure of exit costs.
• Banks failed to ascertain properly their customer's understanding of risk.
• Advice was given when it should not have been.
• Swaps were often ''over-hedged'' -  in other words the amounts and/or duration of the swap did not match the underlying loans.
• Bank rewards and incentives were a driver to selling swaps.

Notwithstanding the FSA's conclusions, the merits of any potential claim will still very much depend on individual circumstances including the factual matrix at the time and the degree of sophistication of the borrower. 

Members of Chamber's commercial team have advised on swaps mis-selling and are currently instructed in ongoing claims against banks and so are well placed to advise on the merits of potential claims.