According to the Financial Conduct Authority (FCA), the UK's four largest banks have upped the pace of payouts to small businesses mis-sold interest rate hedging products.
1,040 firms had been paid a total of £158.6m in compensation from Lloyds, RBS, Barclays and HSBC by the end of December. In November a total of £81.2m was paid in redress, with 547 businesses accepting payments.
What's been paid so far accounts for just five per cent of the £3bn the banks have earmarked for redress.
The regulator ordered a review into almost 30,000 cases last May after finding serious fault with how banks sold interest-rate swap products. These were designed to insure small businesses against the risk of higher interest rates.
When rates fell, firms were left with hefty bills, usually running into the tens of thousands, along with (often previously unknown about) penalties to free themselves of deals.
Clive Adamson, director of supervision at the FCA, said today:
Banks have picked up the pace since November; we asked that they focus their efforts on making far more rapid progress in assessing individual cases and crucially in providing redress. May remains the target for all offers to have been sent out and the banks involved are working towards that.
Any affected business that has been invited to join the scheme and hasn’t, needs to act now so they can receive the redress they’re due.