Tag: HSBC

FCA IRHP Review - KPMG whistleblower: RBS fought to reduce size of interest rate swap redress

FCA IRHP Review – KPMG whistleblower: RBS fought to reduce size of interest rate swap redress

A KPMG whistleblower revealed that RBS pressured the FCA Interest Rate Hedging Product (IRHP) redress scheme to reduce compensation payouts, often challenging claims over £750,000. RBS preferred offering alternative products rather than cash refunds and frequently argued sales were compliant to avoid redress. The FCA’s review was criticised for lacking independence, allowing banks to self-assess wrongdoing, causing unfair delays and rejections of consequential loss claims. Many SMEs have been short-changed due to these flaws, highlighting the need for urgent legal advice and challenge of unfair redress offers.

HMRC Tax Disputes Litigation Solicitors Office Barrister London

HMRC Advice for the tax treatment of Interest Rate Hedging Products (IRHP Review) redress payments

HMRC has issued tax advice leaflets for banks to hand to customers receiving redress from mis-sold Interest Rate Hedging Products (IRHP), urging correct tax return reporting. Affected banks must review sales since 2001 under FCA supervision, leading to customer compensation. Redress payments, consisting of basic redress, 8% compensatory interest, and consequential losses, are generally taxable income or subject to capital gains tax. Individuals should account for tax deducted from interest. HMRC recommends consulting an accountant for complex scenarios.

Financial Conduct Authority FCA UK Logo - LEXLAW Litigation Law Firm in London

Interest Rate Swaps Mis-selling: FCA Publishes IRHP Review Statistics

The FCA’s update on the IRHP mis-selling review reveals severe delays, with only 10 final redress offers accepted out of over 30,000 cases after 14 months. RBS, with the largest review population, lags behind, still classifying many customers. Only 2% of sales have completed compliance assessment, with 93% found non-compliant.

Financial Conduct Authority FCA UK Logo - LEXLAW Litigation Law Firm in London

‘FCA Review’ of Interest Rate Hedging (IRHP) Sales: Written Statement or ‘Fact Find’ Interview?

The FCA/FSA Hedging Review is conducted by the banks, not the regulator, and involves recorded interviews or fact-find meetings with customers. These interviews can be one-sided, with the bank’s lawyers asking questions designed to limit compensation. Customers often have limited rights to access bank records or challenge questions. A written statement, prepared with legal guidance, can be a safer way to present the sales experience without the risks of interviews.

The Parliamentary Commission on Banking Standards’ Final Report calls for radical reforms to restore banking trust, addressing LIBOR manipulation and derivatives mis-selling. Key proposals include criminal liability for reckless bankers, improved governance, stronger regulator duties, and wider access to the Financial Ombudsman Service for small businesses. The report also urges greater financial literacy, transparency, and regulation to prevent banks from disclaiming advisory responsibility when selling complex products like interest rate swaps. Lexlaw supports clients affected by such mis-selling and advocates for fairer banking practices. Contact Lexlaw for expert legal advice and representation.

The Banking Commission’s Proposals relevant to Swaps Mis-selling

The Parliamentary Commission on Banking Standards’ Final Report calls for radical reforms to restore banking trust, addressing LIBOR manipulation and derivatives mis-selling. Key proposals include criminal liability for reckless bankers, improved governance, stronger regulator duties, and wider access to the Financial Ombudsman Service for small businesses. The report urges greater financial literacy, transparency, and regulation to prevent banks from disclaiming advisory responsibility when selling complex products.