Interest swap rates is a “gamble” by the bank and the business owner on whether the business loan interest rate will rise or fall. Whilst selling these loans, banks paid more attention to the possibility of rates rising and not if they were to fall for any extended period. Over the last few years the interest rate has fallen to historic lows, meaning that businesses and individuals who bought these products (or arguably forced into buying these products), are facing crippling monthly repayments and massive costs to get themselves out of the loans.
It must be remembered that the majority of business owners mis-sold business interest rate swap loans had no idea that is was a speculative loan, a gamble. The swap loan was sold on the basis that it was simply a fixed loan, like a fixed mortgage.
Unfortunately, a substantial amount of caravan and leisure park owners have become victims of this scandal and as a result, movement within the caravan, leisure and mobile home park industry has come to a standstill.
The Financial Services Authority(FSA) has found that there were “serious failings” in the sale of Interest rate swaps, and most of these products were mis-sold to caravan and leisure park owners between 2005 and 2008 but investigations can take place as far back as 2001.
The top four UK banks that have mis-sold interest rate swap loans to small businesses since 2001 are hereunder:-
There has been approximately 200,000 interest rate swaps sold to small and medium-sized businesses (SMEs) in the UK over the last five to ten years and it has recently become apparent that the holiday park industry has been significantly affected.
There are approximately 5,500 caravan parks in the UK, with the majority of these being family owned, it is likely that many caravan and leisure park owners have entered into an interest rate swap or hedge without being aware of it.
Many hard working, decent and dedicated caravan and leisure park owners have faced financial ruin, stress and ill-health as a result of the consequences of the mis-selling of interest swap loans. Some caravan park owners are struggling to pay the swap payments every month in addition to their loan repayments but because of the exit fees, they are unable to sell their parks or properties.
If you are a caravan or leisure park owner who believes they have been mis-sold a business loan with a swap interest rate product please do not hesitate to CONTACT US to see if you have a claim for compensation.