A major injustice has been suffered by thousands of owners of small businesses across the UK who have been mis-sold Interest Rate Swap Agreements (IRSAs) by their banks (otherwise known as business swap loans).
Businesses have complained that IRSAs, which were designed to insure borrowers against steep rises in interest rates, left them swamped by huge penalties after interest rates were slashed to record lows in the wake of the financial crisis.
Many hard working, decent, dedicated individuals have faced financial ruin, stress and ill-health as a result of the consequences of the mis-selling of IRSAs.
The Financial Services Authority(FSA) has found that there were “serious failings” in the sale of IRSAs. Most IRSA’s were sold between 2005 and 2008 but investigations can take place as far back as 2001.
IRSAs are complex products, which banks sold to businesses alongside loans to protect them against rises in interest rates, in anticipation of interest rates going up. However, IRSAs caused severe problems for businesses when interest rates subsequently went down, and the FSA believes that banks did not do an adequate job of warning customers about the risks of IRSAs in the event of interest rates dropping. It was also discovered that in some cases borrowers had been pressurised to sign up or told that the interest swaps were obligatory or made them more likely to succeed in their applications.
Once locked in to these costly agreements, many small firms were unable to escape, as exit costs – which in some cases reached £1m – would be enough to bankrupt them. It has been found that one company went out of business after being charged interest amounting to more than twice the original loan amount – a £3m loan racked up an extra £6.1m to pay back.
The FSA found a range of poor sales practices including; poor disclosure of exit costs, failing to ascertain the customers’ understanding of risk and “over-hedging” where the swap is larger than the loan. It was also found that sale staff were incentivised to sell more complex products. Please Contact Us now for further advice on IRSAs.
Need Legal Help?
We have an excellent track record claimingcompensation against major banks and lending institutions for mis-sold insurance contracts and products. There is no conflict of interest with us or any bank. As a specialist firm of solicitors we have no fear in taking on large banking institutions, we do not have an overdraft facility or even borrow any money from any bank to run our own business. In fact we threatened to take legal action against our CREDIT card provider because they tried to stop our taking card payments from clients who were taking action against banks for mis-sold PPI.
No Win, No Fee, No Worry, Service
We are confident to offer you a legal service that we are prepared, given the right facts, to offer our clients a no win, no fee, service to claim compensation for mis-sold business interest rate swaps. In short, if you lost your case against the bank and we obtain litigation insurance, you will not have to pay for any costs as the litigation insurance pays the banks legal costs. if you win, you are likely to recover all or the vast majority of your legal costs from the bank. in most cases, win or lose you often do not have to pay a penny.
If court action is not right for you, the Financial Service Authority has provided a free service to make a claim, but you must make a claim yourself. Alternativiely for a fee of 25% plus vat, we would be able to represent you make a claim through the scheme under a no win no fee service. Thus if you fail in your claim under the scheme, you pay us nothing; if you win, you pay us 25% of the financial benefit of the claim plus vat.
Without fear or favour, conflict or prejudice we are equipped to take action on your behalf.
Please CONTACT US NOW for initial free advice on interest rate swap claims.
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