Banks are being put under pressure to speed up compensating the scores of farmers thought to be struggling as a result of mis-sold interest rate protection products. The scandal emerged last summer when the Financial Services Authority (FSA) revealed "serious failings" in the way these complex hedging products had been marketed to thousands of small and medium-sized companies, including many in the agriculture sector. Eleven high street banks, including Barclays, Lloyds Banking Group, HSBC, the Royal Bank of Scotland, the Co-Operative Bank, Santander UK, and the Yorkshire and Clydesdale banks have agreed to compensate firms which were the victims of such mis-selling. Several other smaller lenders have joined the FSA compensation scheme, but there is widespread concern that the process is taking too long. Guto Bebb, the Conservative MP leading the all-party Parliamentary campaign to get redress for business, has warned that some lenders are dragging their feet, delaying the ability of other banks to launch the pilot scheme. He has also written to the FSA to point out that, "We should not allow a position to develop where the banks can only move forward at a pace dictated by the most intransigent institutions." Daniel Fallows, a director at Haydock-based Seneca Banking Consultants, which is handling a number of claims for farmers, said: "Action needs to be taken as an absolute priority. Thousands of SMEs have been sold products by banks they thought they could trust which in fact have damaged their business. The owners have been left straddled with ruinously high interest rates for loans and a great deal of personal anxiety and stress." "The businesses taking out these products included the owners of farms, pubs, restaurants, hotels, and businesses as small as single outlet cafes and fish and chip shops." "The products were often presented to them as a simple insurance against rising interest rates, when in fact these hedging products are highly complex financial derivatives." "Many victims were not made aware of the nature of what the bank had involved them in - or the very significant costs attached to exiting the product. In some cases, this has caused businesses to fail." "One of the complications for any business owner wanting to go public with just how damaging these schemes have proved is that if their dispute with their bank becomes public knowledge it can damage their business," said Fallows. "Directors can also be reluctant to talk about it because they feel they have been duped by the bank into accepting what was in reality an inappropriate product sold by a highly incentivised individual."The FSA estimates that over 40,000 small and medium businesses may have been mis-sold interest protection products which involve mechanisms known as swaps, collars or caps. "But it’s important to check your finances and take specialist advice if you think you were sold one of these interest-protection products" said Daniel of Seneca Banking Consultants. Some borrowers have already filed complaints with the Financial Ombudsman Service. In findings published in October, two unnamed banks were ordered to pay hundreds of thousands of pounds in compensation to two customers who were mis-sold hedging products. Identified only as 'Bank E’ and 'Bank S’, the lenders were accused of putting their own profits ahead of the customers’ interests in selling them the hedging products that ended up crippling the businesses due to the high interest payments. One judgement involved an unnamed farmer identified as 'Family W’. Tony Boorman of the Financial Ombudsman Service said 'Bank E’ had sold the hedges "primarily for the bank’s commercial convenience and with little or no attention to the needs of its clients." Boorman's findings in both cases overturned original verdicts in the banks' favour and raise the prospect of a flood of new cases from scores of farmers sold interest rate hedging products. In the case of 'Family W' against 'Bank E', the new FOS verdict recommended the lender pays compensation to the farmer that could exceed £500,000. Estimates of the eventual cost of hedge mis-selling vary greatly, however some experts believe the scandal could end up costing the banking industry more than £10bn, potentially making it more costly than payment protection insurance mis-selling.