Compliance
Banks' Redress For Mis-sold Swaps Surges To £81 Million
The amount paid in compensation by banks having mis-sold interest rate swaps has skyrocketed and passed £81 million in November, as a result of a review by the Financial Conduct Authority.
The amount paid in compensation by banks having mis-sold interest rate swaps has skyrocketed and passed £81 million ($132.5 million) in November, as a result of a review by the Financial Conduct Authority. This is equal to a five-fold rise compared to the amount of redress in October.
The compensation process has been somewhat sluggish up until now, but is finally picking up steam as new figures from the regulator revealed that over three-quarters of 18,400 people invited to join the review have opted to do so.
Conversely, only 34 per cent of compliance assessments have been completed, yet 95 per cent of those completed were non-compliant, broadly in line with the rates of non-compliance found since August.
The £81.2 million paid out so far has been paid out to only 547 customers who have accepted the offer, out of 6,100 who are in the redress phase. Of those 6,100, the FCA has completed redress determinations of 3,300 and sent determination letters to 2,600.
“I welcome the fact that these figures show the pace of the banks’ reviews continuing to increase and more businesses and customers are starting to receive compensation payments, but we will keep the pressure on to ensure they continue to move as quickly as they can,” said Clive Adamson, director of supervision at the FCA.
In November, the number of redress offers accepted (547) outpaced the number of outcomes where no redress was due (438) for the first time since the review began.
“Last month we wrote to the CEOs of the four major banks to re-assert our expectation that redress should be delivered to customers quickly and to agree practical ways to speed up the process. The banks’ responses have been positive, with three of the four major banks saying to us they now expect to complete all initial redress determinations by May 2014,” added Adamson.
The momentum on the swaps redress has especially increased after the financial watchdog said in November that banks needed to pick up speed in the review, with banks having at that time collectively paid out just £15.3 million with only 125 offers accepted by customers. Read more on that story here.
