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Farmers pay for mis-sold products
Updated 3:26pm Friday 28th March 2014 in Farming
A CAMPAIGNING York lawyer says says several Yorkshire farmers have had to sell land to continue payments for mis-sold hedging products by banks.
Johanne Spittle, a director of Lupton Fawcett Denison Till, said the land had been in their family for generations but has had to be sold as they wait for banks to address their redress claims.
Other businesses, mostly small and medium enterprises in Yorkshire and the North East, have had to take out further borrowing to continue payments, because of delays in the Financial Conduct Authority’s (FCA) Redress Scheme.
Ms Spittle brought the first successful bank derivative mis-selling case to trial against HSBC in Leeds in 2011 for a Scarborough fish and chip shop and has since advised scores of agriculture, leisure services, property and development businesses, as well as private individuals, who were victims of mis-selling .
The FCA has reported that £306m had been paid out by Britain’s biggest four banks – Lloyds Banking Group, RBS, Barclays and HSBC –by the end of January and that “redress is rapidly flowing to small businesses”.
But Ms Spittle says that is not her experience. “I have clients who submitted cases to the banks in April 2013 but have still not been assessed,” she said, “Those which have been assessed, and been paid ‘initial redress’ still await consideration of consequential loss claims where they have suffered other financial losses as a result of having the derivative payments deducted. This is not my idea of rapid.”
Her client’s interim settlements have ranged from £82,000 to £300,000, although, where customers have been mis-sold several products, the total claims are above £1m, excluding consequential losses.
Ms Spittle said that, while businesses await assessment, many still have to pay thousands of pounds a month even though the bank is likely to have to repay these sums.
She said: “The banks say that they will not suspend payments unless the customer is ‘financially distressed’ which means that they will stop taking payments only when the business has been brought to its knees.”
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