£1.8bn compensation for small businesses over interest-rate swaps, says FCA

Small firms mis-sold complex financial products known as interest-rate swaps have been paid nearly £1.8 billion in compensation, the Financial Conduct Authority said.

The products were meant to help the companies hedge against rising interest rates, but when these fell they were left paying extra charges and facing penalties to get out of the deals.

The FCA also asked banks to remind those still eligible to complain to come forward, as a deadline for new claimants expires on March 31.

Nine banks in the scheme had identified 18,000 customers sold products known as swaps or collars, with 16,000 choosing to join the review while 2,000 chose not to participate.

The FCA said all claims within this category had now been determined and “basic redress” made as appropriate.