A recent FSA (Financial Services Agency) review means you could be entitled to compensation from your financial institution if you were mis-sold these products. So how do you know if this is the case? Here are some things to look for:
- If the length of your loan facility is significantly different to the length of the Swap agreement (i.e. the Swap is longer), the reasons for this mismatch should have been made clear.
- If the lender compelled you to accept a particular Swap product as a condition of granting the loan, you should have been made aware of the reasons and the commercial obligations you were taking on.
- Unless there were specific reasons for extending or narrowing the scope of the Swap outside of the value of the actual loan, the values might be expected to be similar. If there is a mismatch between the values, the reasons for this should be clear to you and should be relevant to your individual circumstances.
*Some Swap agreements exhibit break clauses which are so excessive that their relevance to the loan they were bought to protect is highly questionable. Look into the release clauses and the redemption fees associated with breaking the agreement – do they bear any resemblance at all to the sums of money involved in the loan?
*Did you fully understand what you were buying? The banks have a duty of care towards their customers which includes an obligation to fully explain the detail of the products they are proposing. This is especially true of complex financial products being sold to non-specialists.
If you believe that you have been mis-sold these, or any other financial products, we would recommend that your first step be to obtain specialist advice and, if appropriate, lodge a formal complaint with your bank. We would be delighted to help you with this. Please contact Noël de Spéville, our specialist solicitor, for a free initial telephone consultation.