Swaps crusader Seneca accuses banks of ‘stonewalling’
ONE of the largest players in the crusade to get compensation for businesses mis-sold interest rate protection policies by the banks, alleges lenders are “stonewalling” to delay the claims process.
Haydock-based Seneca Banking Consultants, which is is advising 170 businesses in the North West, Yorkshire and Midlands, has written to the Financial Conduct Authority to highlight bank delaying tactics.
Seneca Banking Consultants, which is managing claims against £1bn of debt, accuses the banks of “dragging their feet” to exploit the fact that breaches of contract are only actionable within a six-year time frame.
Daniel Fallows, director of Seneca Banking Consultants said: “Every day businesses are losing the right to take legal action because of the six-year rule. The banks have been delaying, denying and stonewalling to run down the clock. We would ask the FCA to publicise how many settlements have been agreed by the banks and paid within the past 12 months. We believe the figure is derisory.”
Seneca’s open letter to FCA chief executive Martin Wheatley criticises the process of obtaining justice as “slow, formulaic and lacking in transparency”. It also claims many victims have been left with little scope to obtain redress and that the compensation system is “weighted in the banks’ favour.”
Seneca is bringing claims for clients operating across sectors that include property, construction, retail, hotel and leisure, and care homes. The company has been asked to speak to members of the Treasury Select Committee.
The bulk of claims for mis-selling of interest rate protection policies, known as swaps, collars and caps, relate to loans taken out between 2005 and 2008.
They were marketed as a simple way of protecting against rises in the cost of borrowing, and often made conditional as part of a loan agreement. As interest rates fell to their historic low of 0.5% they became disastrous, and have been blamed for a number of company failures.
On June 28 2012 the then regulator the Financial Services Authority said it had ‘serious concerns’ about the way these products were sold to business. Early estimates suggested at least 40,000 SMEs were affected.
