Conservative MP Guto Bebb who has been campaigning for redress for customers missold interest rate swaps has called for banks to suspend the collection of ongoing payments pending a full sales review.
Last week, Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland agreed to fully review interest rate swap sales following pilot findings from the FSA which reveal that of 173 sales reviewed, over 90 per cent did not comply with regulatory requirements.
The British Bankers’ Association has stated that where banks agree on a case by case basis that meeting the ongoing swap payments is causing financial distress, banks will suspend collecting the payments at the customer’s request pending the outcome of the review.
All Party Parliamentary Group chair on interest rate swap misselling Bebb says: “In light of the FSA’s finding that 90 per cent of cases involved misselling, it is very difficult to understand why the burden of proof to justify suspending swap payments remains with the small business. From a point of trying to support businesses and making sure they survive, the suspension of swap payments should be the de facto position, unless the banks can argue otherwise.”
Solicitor firm Howe & Co consultant John Walker says: “The ongoing payments can be quite crippling, so the banks should accept a full moratorium now.”
The BBA declined to comment.