FSB urges banks to suspend payments to firms affected by mis-selling
25th February 2013 | NewsThe Federation of Small Businesses (FSB) has called on the four big high street banks to suspend payments for all firms that were affected by the interest rate swaps mis-selling scandal.
It is widely expected that the banks will soon begin sending out letters offering redress to some businesses, at which point they will be given 28 days to consider whether to accept the offer.
The FSB, however, has questioned the wisdom of this plan, observing that thousands of firms affected by the scandal have yet to go through the appeal process.
What's more, compensation could take months to reach those affected.
Big banks have, of course, already agreed to suspend payments on a case-by-case basis, but that hasn't failed to totally satisfy the FSB.
"If the banks are genuinely serious about tackling the culture of mis-selling, they should be taking action now by suspending these payments across the board and taking a proactive approach by reaching out to firms in financial trouble," the FSB told This Is Money.
The FSB has also blasted those banks that operate their own individual schemes for assessing mis-selling.
"There should be just one, truly independent scheme," a spokesperson insisted.
As many as 90 per cent of small businesses that had taken out a swap had been mis-sold, according to the Financial Services Authority.
This figure serves to underline the scope of the scandal and goes some way towards explaining the attitude of the FSB.
Earlier this month, the FSB launched a new legal process that will provide members with advice on how to be compensated for being mis-sold complex financial products.
The body confirmed that it will be working with three professional guidance and support organisations to help provide redress for small businesses caught up in the scandal.
FSB's National Chairman, John Walker, said the new process should provide small businesses with the support they need to get through this process.
Posted by Thomas Fletcher