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'.
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.
The City watchdog found that 90% of interest rate swaps sold to small businesses were mis-sold, and customers are entitled to compensation.
An FSA review found that more than 90% of so-called interest rate swaps sold to businesses were mis-sold. But what are they?