Bank regulators have been blasted by business campaign groups after it emerged only 10 firms have been compensated for the mis-selling of complex financial products since a formal review was established in May.
A Financial Conduct Authority (FCA) update revealed less than a dozen firms have agreed redress deals, totalling £500,000, since the start of the formal interest rate swap review process four months ago.
It said 210 offers were sent out to firms, with another 1,700 due to go out “shortly”.
A total of 2,800 newly-recruited bank staff have worked through more than five million documents across the major lenders, the FCA added.
Banks have identified more than 30,000 potential cases of mis-selling since the end of 2001 and the regulator said about 85% more than 25,000 are being reviewed.
It expects most customers to be informed of the result of their review and possible compensation by the end of the year. Both the Federation of Small Businesses and the Bully-Banks campaign group rounded on the scheme.
The FSB said the figures were “depressing” and called on the FCA to “get a grip” on its “inept” redress scheme.
“We are quickly losing confidence in the banks and the regulator as this scheme remains unbelievably slow,” said Scottish policy convener Andy Willox.
“The protracted nature of the redress scheme can only further harm those businesses which are victims of mis-selling, and hinder efforts to increase confidence in the high-street banks.”
Bully-Banks chairman Jeremy Roe said his organisation was “bitterly disappointed” and demanded the regulator put more pressure on lenders.
The swaps were marketed as low-cost protection against rising interest rates, often as a condition of a business loan, but firms were left with major bills after the financial crisis caused interest rates to slide.
Britain’s biggest banks have already put aside more than £2.5 billion to cover the cost of compensation, on top of the industry’s mammoth bill for the mis-selling of payment protection insurance.
FCA chief executive Martin Wheatley said banks had “made progress”.
“But like the thousands of affected small businesses, we want to see redress paid quickly to those who have suffered loss as the result of mis-selling,” he added.