Jim McGovern presses Government over Bank mis-selling victims
12 March 2013
Dundee West MP Jim McGovern today pressed the government during Treasury Questions in the House of Commons to take action to support the victims of mis-selling by the banks.
Small business owners in Dundee contacted Mr McGovern to complain that they had been sold so-called ‘interest rate swap’ products that were designed to protect small businesses who had taken out loans from increases in interest rates.
The FSA ruled that consumers had not been properly informed of the risks associated with the products, had not explain the significant cost of discarding the product or nor that repayments may inflate if interest rates decreased, as they did.
The banks also failed to support customers who did not have access to sophisticated and independent financial advisors.
A review is underway of products sold by RBS, Lloyds, HSBC and Barclays however customers of Clydesdale Bank and others will not have their own predicaments investigated by the FSA, as they claim the products sold were unregulated commercial loans which included elements of interest rate swapping, and were not separate interest rate swap products as sold by the big four banks which are regulated under EU law by the FSA.
Clydesdale Bank and others accepted that a much more limited review would be done by them.
However, this review is not on the same scale as those done by the other banks, they do not fall directly under the supervision of the FSA nor is it clear which products these banks will regard as appropriate for investigation.
It was unclear from Minister Greg Clark’s response whether or not the limited review that had already been agreed would continue, or if a new review would be undertaken.
Jim McGovern said;
“I sought greater clarity about what will be done to support the victims of the sharp and unfair practices conducted by the banks.
"Unfortunately I did not receive it.
“It beggars belief that products that look like, sound like and smell like the products currently being investigated by the FSA have not been included in the thorough review now underway.
“The limited review being done by the banks themselves will give no confidence to the victims who need to know that their cases are being looked at comprehensively and impartially.”
Mr McGovern concluded,
“I will be seeking further clarifications from the Government.
"It appears to many that they are letting the banks get away with shocking examples of bad practice.
"They are badly letting down small businesses who are struggling to cope with the costs being inflicted on them because of these products.”