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Interest Rate Hedging Products – Hidden Fees for Insolvency Practitioners

Mis-sold interest rate hedging products – IRHPs

Following its investigation in 2012, which found that 90% of interest rate hedging rate products had been mis-sold by the banks, the Financial Conduct Authority ordered the banks to review the sale of these products and pay compensation to businesses affected by the mis-selling.

So far £1.8 billion has been paid in redress, including £365 million to deal with consequential losses. Your firm could benefit from this.

Embedded Products or Hidden Swaps

Our focus is predominantly on Interest Rate Hedging Products which relate to ‘embedded swaps’ or ‘hidden swaps’, which are not easy to spot.

Some interest rate swaps are not found in a separate agreement and are embedded into the loan itself. Therefore the borrower may not even know that they had been paying for a hedging product and as a result the IP would not be aware either.

Embedded products are not included as part of the FCA review as these products are not regulated. In our experience, we can usually identify if there is likely to be a hidden swap from reviewing the loan documents. If we feel there may be a hidden swap we can make the necessary enquiries to confirm if this is the case.

Different banks refer to their embedded hedging loans in different ways. For example, Lloyds tend to refer to this loan as a ‘Treasury loan’, RBS and NatWest tend to call the loan a ‘Sterling Fixed rate loan’ and Clydesdale Bank and Yorkshire Bank call it a ‘Tailored Business Loan’.

It is believed more than 70,000 embedded interest rate swaps were sold so this potentially amounts to a much bigger problem than standalone swaps which were covered in the FCA review.

TLW Solicitors are working with Insolvency Practitioners across the Country to recover assets using our expertise on Interest Rate Hedging Products (IRHPs) mis-sales. Realising hidden assets is a simple process from your perspective with no upfront costs, with a minimal amount of work on your behalf. You can rely on our specialist knowledge to deliver you a result.

TLW Solicitors are here to help. Fill in our enquiry form, email us at  or call us today.