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Banks face mis-selling payouts

Britain's scandal-hit banking industry was facing another hefty compensation bill after a review of complex products sold to small businesses found more than 90% had been mis-sold.

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FSA: 90% of interest rate swaps mis-sold

The Financial Services Authority has confirmed that it will conduct a full review into the mis-selling of financial products to small businesses, in the form of interest rate 'swaps'.

Read: What are interest rate 'swaps'?

The initial pilot has shown that 90% of sales "did not comply with at least one or more regulatory requirements". The watchdog said a "significant" number of these small business customers will be entitled to compensation.

The work on the pilot has confirmed the FSA’s initial findings of mis-selling of IRHPs.

The FSA looked at 173 sales to non sophisticated customers and found that over 90% of the sales did not comply with at least one or more regulatory requirement. A significant proportion of these 173 cases are likely to result in redress being due to the customer.

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