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Tory whip sends RBS interest rate swap failure dossier to FCA

Guto Bebb

A senior Conservative backbencher has submitted a complaint to the FCA over fears RBS is being allowed to settle interest rate swaps disputes less generously than other lenders.

Working in collaboration with lobby group Bully Banks, recently appointed Tory whip Guto Bebb sent a dossier of 120 cases to the regulator in late January to raise concerns that customers of RBS were being poorly treated.

Speaking to Money Marketing, Bebb says he is worried the FCA is failing to properly oversee a redress scheme launched in light of the scandal, and that RBS customers are more likely to be offered alternative swaps, rather than offer full redress, when compared to other banks.

He says: “We seem to see with RBS that they are relying on a condition of lending which is very generic. In other words, they were basically saying you will need some sort of interest rate protection product in order to qualify for this loan.

“But we have examples from Santander, HSBC and Lloyds where they have decided that when the condition of lending is that vague, it’s not legitimate.”

An FCA spokesman says: “The redress scheme was designed to deliver fair and reasonable redress to customers as quickly as possible. 

“Every case, from start to finish, is overseen by an independent reviewer who has access to all of the information provided by the bank and customer and will decide on preconditions of lending. These reviewers have to agree on whether redress is due and on how much is offered.”

RBS refused to comment.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “Every case, from start to finish, is overseen by an independent reviewer….” Independent from the FCA and from any FCA influence? If the reviewers are FCA employees, then in just what way are they independent?

  2. Julian

    Do please just once bother to do some background research before broadcasting your ingorance.

    All the banks have skilled persons appointed to oversee their work. See http://www.fca.org.uk/consumers/financial-services-products/banking/interest-rate-hedging-products/agreements

  3. FCA review ignores capital, collateralisation and creditworthiness risks. Just like the mis-selling did. Review simply considers actual cash flows undertake derivatives, which were often small by design.

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