Interest Rate Swaps aka Hedging Products

Posted by John Burrowes on Monday, July 01, 2013

Up to 2007 banks were selling products called interest rate swaps, or hedging products, which are complex financial products which aim to off-set or “hedge” the future costs of interest rate changes during the life of a loan. Many of these agreements set interest rates at a fixed high percentage to protect against rising interest rates. When interest rates fell in 2007-2008 people and businesses who had signed up to these agreements were tied in to continue paying crippling high rates.

These agreements which were meant to be a “protection” have led to financial difficulties for thousands of customers.

These controversial derivative claims were and are perfectly legal, provided that certain selling requirements were adhered to.

The Financial Services Authority have investigated such arrangements and concluded that the individual Banks should consider whether there was any mis-selling of the products.  In fact they believe that up to 90% of these products were mis-sold in some way, even down to failure to follow due process.

People and companies who entered into these financial instruments will have paid many tens or hundreds of thousands of pounds in interest charges more than what they perhaps should have. Many have also been told to get out of them they would have to pay substantial penalty payments.

Provided that certain conditions applied at the time that the individual arrangement was put in place it is possible that people and companies may get compensation as well as their money back.  We have been working with several clients in this position and have made claims on their behalf.

If you have entered into a hedging or interest rate product since December 2001 you may be able to make a claim.  We would be pleased to discuss your circumstances with you and see whether we can help to make the claim.

Call Robin Hooper now on 01743 292 444 or send him an e-mail on