Tragic tales of the consequences of the mis-selling of swap loans, also known as Interest Rate Hedging (IRH) products, were outlined at a recent meeting attended by Farmers' Union of Wales business development director Emyr James.
"Scores of business proprietors from all over Wales who had been sold IRH products gathered at Ty Hywel in Cardiff Bay to raise awareness amongst Assembly Members of a major issue with the sales," said Mr James.
“Farmers are amongst businesses where there is the possibility that mis-selling has taken place. Some have complained about their plight but it is believed there are many more farmers affected by this issue who are reluctant to come forward.
"Tragic tales of the consequences of mis-selling were heard at the meeting including businesses going into administration and high levels of personal stress."
Chaired by Ceredigion AM Elin Jones, the meeting was addressed by Aberconwy MP Guto Bebb and founding director of Bully Banks Jeremy Roe who outlined their lobbying efforts at Westminster and with the Financial Conduct Authority (FCA).
In January 2013, the former Financial Services Authority (FSA) found that over 90 per cent of sales from a sample study of cases breached their regulations and over 90 per cent of those were mis-sold.
"This high proportion of non-compliant sales is being replicated in the ongoing FCA-supervised review which aims to provide rapid, fair and reasonable redress to small businesses mis-sold these instruments.
"It is generally accepted that the sale of these Swap Loan products to family farming businesses was totally inappropriate as they were far too complicated for them to fully understand the risks involved.”
Mr James advises any farming business in doubt whether they have been sold an IRH product or swap loan to take the following steps:
• Enquire of your bank whether any loan account established/restructured during period 2005-2008 is an IRH product.
• If you have been sold an IRH/swap loan, ask your bank to review the selling process in accordance with FCA guidelines.
• Report the fact that there is the possibility you may have been mis-sold a swap loan to your MP and AM.
• Join Bully Banks, an organisation made up of individuals who have been mis-sold a hedging product that coordinates representation at FSA and Central Government level to secure proper redress and compensation.
