BRITAIN’S biggest banks have accelerated their compensation payments to small firms who were mis-sold interest rate products, the City watchdog said yesterday.
It comes as the Financial Conduct Authority’s (FCA) May deadline for repaying the businesses looms.
All of the small businesses who are thought to have been affected and have been deemed to be unsophisticated by the regulator were contacted by banks by the end of February.
Of those 18,800 who are covered by the review, 83 per cent have chosen to opt in to the process.
And out of those who have agreed to take part, 67 per cent have so far filled out the compliance assessments as the next stage of the process.
That is up from 57 per cent in January and from 48 per cent in December.
The proportion found to have been mis-sold interest rate swaps has held steady at 96 per cent of the small business whose cases have been through the review.
So far 11,700 are in the redress phase of the process – a huge jump from the 9,000 who were at that stage in January and the 7,500 in December.
And 8,400 have received letters offering compensation, up from 6,400 a month earlier.
Of those, 3,430 have accepted the offer, up from 2,092 by the end of January.
Total redress paid by the end of February amounts to £482m, up from £306.3m a month earlier.
The compensation process has been more rapid than the payment protection insurance (PPI) redress programme, as banks have been given a hard deadline by the FCA, and as a result have rushed to contact all those affected. However, they are not all expected to meet that deadline.
Lloyds is expected to complete the process in April, RBS and HSBC should have compensated all their customers by the end of May, but Barclays will run over into June.