How is the FSA dealing with the mis-selling of interest rate hedging products?

In January 2013, the FSA published the results of a pilot scheme in an attempt to provide redress to individuals and businesses that were mis-sold interest rate hedging products.

The FCA reached agreement with Barclays HSBC, Lloyds Banking Group, The Royal Bank of Scotland and National Westminster Bank to provide appropriate redress where mis-selling has occurred, whereby the banks agreed to:

• Provide fair and reasonable redress to non-sophisticated customers who were sold structured collars;
• Review sales of other interest rate hedging products (except caps or structured collars) for non-sophisticated customers; and
• Review the sale of caps if a complaint is made by a non-sophisticated customer duringthe review.

The exercise for each bank will be scrutinised by an independent reviewer and overseen by the FCA.