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Interest rate swap redress hits £482m

Major banks have paid out a record amount in redress for interest rate swap misselling in February taking total payouts to £482m.

The latest FCA data shows more than 1,000 consumers received £175.7m last month for missold swaps. It follows £147.7m paid out in January after a slow start when just £158.6m was paid between August and December last year. 

In February 1,338 customers were paid, compared to 1,052 in January. A total of 3,430 customers have now been paid since the redress scheme launched in August with 962 claims rejected.

Ten banks are involved in the review but the Royal Bank of Scotland has the most affected customers with 3,159 at redress stage.

HSBC has made redress offers to 2,181 customers, Barclays to 1,405 customers and Lloyds Banking Group to 953 customers.  Other banks account for 233 redress offers.

The regulator first raised concerns about the ways banks sold interest rate swaps in June 2012. The FCA carried out a review of 173 sales of interest rate swaps and found that over 90 per cent did not comply with regulatory rules.

As a result the banks agreed to review the sale of interest rate swaps, which are designed to protect consumers against increases in interest rates. Over 30,000 sales are being reviewed, covering sales dating back to 2001.

Facts & Figures Financial Planning managing director Simon Webster says: “When this scandal first broke there was real hardship and businesses lost as a result of the extremely onerous costs related to interest rate swaps. It is highly regrettable it has taken this long to unwind them.”

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