Banks must commit more resources to the review of mis-sold hedging products

Banks must commit more resources to the review of mis-sold hedging products to ensure the process is completed properly ahead of the spring 2014 deadline.

That is the view of Susan Hopcraft a dispute specialist from Midlands law firm Wright Hassall, which is advising a number of businesses on their complaints.

The country’s biggest banks have been forced to set aside funds to reimburse individuals and companies who were mis-sold products designed to protect them against interest rate risk after their businesses had to make large pay-outs as rates fell.

However, a recent report from financial watchdog the Financial Conduct Authority (FCA) has sparked concerns that many banks will not meet the spring 2014 deadline.

Working with everyone from technology companies to farmers, property investors and even B&B owners, Ms Hopcraft has experienced varying levels of performance and cooperation from banks on this issue.

She believes that many must pledge greater resources to completing the process thoroughly and accurately.

“I have been struck by the different approaches being adopted by the big banks,” Ms Hopcraft said.

“Some banks have been quick and efficient and have offered good levels of compensation, but the jury is very much out on others, where they seem to be taking a long time at each stage.

“The process is split into stages where complaints are filtered first, before fact-finding then consideration followed by redress where considered appropriate.

“At around 10,000, RBS/Natwest has the biggest number of complaints to process but have so far offered little redress. They may come through in time but it is up to the FCA to start to put the pressure on.

“The deadline is far from definitive so it gives the banks room for manoeuvre but if it is enforced there is perhaps a danger that some might be tempted to rush through complaints without proper consideration.

“Some banks have taken steps to outsource the process while others are dealing with it in-house but, however they intend to handle it, they must make sure there are enough resources available to deal with the volume, and at the moment that seems not to be the case for all the banks.”

There are however steps that businesses can take if they are concerned their complaint will not return a satisfactory outcome

Ms Hopcraft added: “There are other options that can be pursued if the redress scheme fails in any particular circumstances but it could be important to take steps now to preserve those other routes such as the Financial Ombudsman or court.

“But I still hope that the scheme operates well across the board and follows the lead set out by the first banks that have offered good levels of redress.”