The banks at the centre of a multi-billion-pound mis-selling scandal should be forced to inform their victims of an approaching deadline to receive compensation, the Transparency Task Force (TTF) has told MPs.
Victims of the interest rate hedging product (IRHP) scandal should be informed they must file any complaints to the UK’s Financial Conduct Authority (FCA) by 14th December, if they are to receive compensation, TTF founder Andy Agathangelou said in a letter to MPs.
The IRHP scandal saw UK high street banks – including Barclays, Lloyds, and HSBC – mis-sell various IRHP products, including structured collars, to small and medium sized enterprises (SMEs), by giving false and misleading information as to the products risks and benefits.
In 2013, the UK’s Financial Conduct Authority (FCA) entered agreements with nine banks through which they agreed to pay £2.2bn to around 18,000 customers who had been mis-sold IRHPs.
The FCA’s deal however excluded 5,000 customers from receiving compensation, on the basis of a “sophistication test.”
A judicial review application has been filed by a cross-party group of MPs to challenge the FCA’s decision to exclude “sophisticated” customers from receiving compensation.
The FCA is defending the Judicial Review application and is awaiting the Court’s decision as to whether the application can proceed.
The letter to MPs warns those who fail to file their complaints by the 14th December deadline could be excluded from receiving compensation “regardless of the outcome of the Judicial Review”.
The TTF founder is now calling on MPs to find out whether the FCA is planning to take action to ensure the banks’ victims are properly informed “about the deadline and its significance.”
In a letter to MPs, the campaigner also called for all relevant banks and related bodies to be compelled to write to victims to inform them of the upcoming deadline.
An FCA spokesperson said: ““The FCA will continue to consider all complaints on an individual basis in line with our published Complaints Scheme, which has been purpose-built to provide customers with an accessible and easy route to make complaints.”
“As is standard, complaints should normally be made within 12 months of the complainant first becoming aware of the circumstances which led to the complaint.”
“We also have the flexibility to investigate complaints raised after that time if the complainant can show reasonable grounds for delay.”