Seneca handling mis-selling claims on £1bn debt
CORPORATE finance adviser Seneca says it is now managing mis-selling claims against £1bn of debt.
The Haydock-based firm set up a new division – Seneca Banking Consultants – in September to help businesses seek compensation in cases where they believe they were mis-sold complicated financial products.
Seneca’s £1bn reflects over 170 claims made by businesses in the North West, Yorkshire and Midlands, operating across sectors that included property, construction, retail, hotel and leisure, and care homes.
The scandal emerged a year ago when the Financial Services Authority announced that it had “serious concerns” over the way these products were sold to more than 40,000 businesses.
A subsequent report revealed that in over 90% of the 173 cases the FSA examined, mis-selling and breaches of acceptable practice had taken place. The FSA had looked at a sample of cases from Barclays, HSBC, Lloyds and Royal Bank of Scotland.
Daniel Fallows, a director at Seneca Banking Consultants, said: “Property companies were a major focus for the banks and that’s reflected in our case load. But we are acting for every kind of organisation that had a debt requirement – including a Christian charity which has been very badly affected by products its bank insisted it took out.
“The £1 billion landmark is an indicator of the scale of the problem in the North of England – not least because we believe we are one of the larger firms in terms of case load. But the damage caused by these products means the compensation bill could eventually be much higher.
“Every time one of the banks publishes financial results now the amount set aside to cover liabilities arising out of interest rate swap mis-selling just keeps getting higher. The most conservative estimates put the eventual cost of compensation at £3bn – but some analysts go much higher.”
