The review into the suitability of Interest Rate Hedging Product sales is now well and truly underway. The review is conducted by the banks on their own sales in accordance with FCA guidance and over viewed by an appointed Independent Reviewer. It has been a slow process but now we are seeing offers being processed through the Christmas period. On return to work some postboxes will be offering up some unusual issues to consider for IP’s.
We have seen examples of no redress, the sale being deemed ‘in order’ by the bank, and examples of full redress, the sale being deemed not appropriate for the business.
But what does this all mean for the Insolvency Practitioner who has to sign for any offer made?
Lets look at some of the wording in the offers of Full Redress
1. Opening Disclaimer the first issue is detailed at the beginning of redress offers, quote;
‘we will provide you with full redress without assessing whether the sale of your trade was compliant with the regulatory requirements of the Review. This means a refund of the net payments made by you under your Trade, with Compensatory Interest’
The wording is very careful. It details ‘your trade’, with emphasis on no advice, and disclaims the fact that the offer for redress is based on assessment of any regulatory requirements – ‘without assessing’.
2. Acceptance the second issue is the condition required to take the initial ‘Basic Redress offer’, quote;
‘if you do not wish to make or continue a claim for Consequential Loss, you are able to accept the basic Redress Determination (with Compensatory Interest) in full and final settlement of all claims or complaints you have or may have arising out of or in connection with the sale of your Trade failing under the scope of the Review (including claims or complaints which may not have been addressed in the Review, such as those based on fraud or involving allegations of dishonesty on the part of the Bank in connection with the sale)
This is potentially an unacceptable condition.
3. Principal of Redress the main consideration for any IP to accept is the purpose of the review and its principal, quote;
‘Basic Redress – redress to place customers back to a position they would have been in, in accordance with the regulatory requirements of the Review.
I refer back to Point 1.’without assessment’
As a young man I worked in a pub, it used to have a sign that read;
Rule 1 The Barman is always Right
Rule 2 If the Barman is wrong see Rule 1