The high point for the selling of Interest Rate Swap Agreements (IRSAs) occurred between 2006 and 2008 – although many banks began selling these products as early as 2001. It has since emerged that many of these products were mis-sold.
If you have been mis-sold an IRSA and have suffered consequent financial loss, you may be able to instruct a Healys LLP professional negligence lawyer to help you secure compensation.
What is an interest rate swap agreement
An IRSA is a derivative agreement, involving a separate contract, to a loan agreement already in place. The two parties consent to alter the type of interest being paid on the loaned sum, for example, exchanging a fixed rate of interest for a floating rate.
Bank IRSA mis-selling
Banks made many millions of pounds from the mis-selling of Interest Rate Swap Agreements. Consumers were frequently told that IRSAs represented the best protection against the financial implications of interest rate rises.
However, the Financial Services Authority has since found that the products were sold in such a way as to be highly unsuitable for many customers, to the point of being worthless. Indeed, many banks breached the FSA’s strict guidelines regarding the provision of full advice on the scope and cost of protection. There is also evidence that some customers might have been hurried into purchasing policies, without having adequate time to fully consider the consequences.
Fortunately, those affected by the mis-selling scandal can recover compensation – there is a £2.5 billion fund in place to ensure this – however, claims are likely to be limited to £150,000 per claimant, and those with losses in excess of this figure should instruct a professional negligence lawyer to help claim full redress.
Businesses affected by IRSAs
For many of the businesses which bought these products, the long-term implications have been profound. Not only do the costs and failures of the products reduce stability and profitability, there are also significant penalties for the cancellation of an agreement – sometimes tens of thousands of pounds.
It is estimated that as many as 30,000 businesses were mis-sold IRSAs, and professional negligence lawyers believe that the eventual compensation bill could eventually exceed the allotted £2.5 billion.
Healys LLP of Brighton and London
If you believe that you were mis-sold an Interest Rate Swap Agreement and that this has caused you financial loss, you may be able to claim compensation for lost investment opportunity, loss of profit, fees, and other losses.
Healys LLP are specialists in claims for financial negligence and financial product mis-selling. Contact our professional negligence lawyers today for more information.