These products are designed to protect businesses with bank loans against fluctuating interest rates, but many people who signed up to them now say they were not told about the downside that swaps can involve.
Some businesses are now left liable for astronomical extra payments on top of their loans because of swap products which they were sold as a simple ‘add-on’ purchase to their loan.
The Financial Services Authority (FSA) began an investigation into the mis-selling of swaps in March and is continuing to talk to the banks and businesses to determine the extent and severity of poor sales practices.
Theresa said, “I am pleased action is being taken to crack down on irresponsible behaviour by the banks.”
“The banks have an obligation when recommending a product to a customer to explain what it will mean in practice."
"At least two businesses in my constituency are facing huge unexpected bills because they were sold these products by their banks when they were just not suitable for a small business."
“Our small and medium sized businesses are the lifeblood of this country's economy and need all the help they can get to survive. They need to be treated fairly by their banks."
"When I was told about these products by local businesses, I was shocked to hear what they had been persuaded to sign up to. I took it up with the Treasury, the Business Secretary, Vince Cable, and the Financial Services Authority expressing my grave concerns."
"I would encourage any other of my constituents who feel they have been mis-sold these products to contact the FSA immediately.”
Local business owner, Mario Ioannou, who runs a property company added, “The swap product was sold to me over the phone and at no point did my bank explain the full disadvantages. I feel I have been duped into agreeing to something that was wholly to the benefit of the bank. They have put their own financial greed before their customers and have disregarded the long-standing relationship between me and my bank.”¬ù