25 June 2013
Charity struggles to claim compensation
A UK-based international Christian charity says it has experienced substantial financial difficulties because it was mis-sold products by a high-street bank.
The unnamed foundation has reportedly been "absolutely stuffed" because of the manner that it was advised to take four aggressively advertised schemes offered by an institution.
However, in January, the Financial Conduct Authority (FCA) said banks found to have misled customers by providing inaccurate information in some cases will not have to pay compensation, according to Civil Society.
Many financial establishments have been found to mis-sell products such as payment protection insurance and interest rate swaps in recent years and in some cases have been forced to set aside billions to recompense consumers.
But this charity is one of 40,000 small and medium-sized enterprises or not-for-profit groups that were mis-sold interest rate swaps by being told they would be valuable to control expenditure - but when rates dropped in 2008, this became a costly mistake and lost companies thousands of pounds.
Daniel Fallows, a director at Seneca Banking Consultants, which is trying to get compensation for the Christian foundation said: "Banks have targeted some organisations as vulnerable types and really took advantage.
"In the Christian charity case, they were sold four aggressive products which are complex and risky; it's certainly not suitable for charities.
"The bank has no timeframe, there is no appeal system, there has not been any guidance on what constitutes a mis-sell. There has been absolutely nothing from the bank."
Mr Fallows added that he had written to the FCA about the issue and wants to highlight how he believes the charity has been taken advantage of by predatory sales techniques.
The case has recently received high level political attention, with shadow business secretary Chuka Umunna tweeting that he was "shocked" by the situation.
Banks are increasingly being pressured by Whitehall to redress perceived endemic mis-selling of financial products in the lead up to the 2008 financial crisis through providing compensation.
Contact our Commercial and Group litigation solicitors on 0800 916 9054 or email firstname.lastname@example.org if you would like advice on interest rate swap mis selling.
Posted by Francesca Witney
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