What is financial mis-selling in a business setting?
Many consumers will have heard about financial mis-selling from banks because of high profile PPI scandals and other similar issues. However, it’s not such common knowledge that many businesses have been affected by financial mis-selling too.
Some of the most common financial services mis-selling scandals for businesses include:
Interest rate swap agreements (IRSA)
Often referred to as ‘swaps’, this is a type of financial product that was sold as offering protection to SMEs taking out bank loans against rises in interest rates. However, the consequences if interest rates remained low, or the significant cost of exit fees, were often not explained to the business taking out the product, and the associated financial penalties have had a huge impact on many businesses; even resulting in some companies having to close down altogether. Other types of interest rate financial products that businesses may have been mis-sold include caps and collars. If you believe that your business has been mis-sold a financial product like this when you took out a loan, contact Stephensons for expert advice on the next steps and whether you might be eligible for compensation. You can find out more here.
Foreign exchange financial mis-selling claims
For businesses that trade overseas regularly, you may have been sold a financial product from a financial institution to protect you from movements in exchange rates for foreign currency. There are a number of different products that are designed to do this, and these types of agreement can be complex in structure, meaning that it can be difficult for businesses to evaluate whether it’s a suitable product for them, or the best option in their specific circumstances. For these reasons, some of the businesses who purchased this type of product may not have been fully aware of all of the implications of the agreement, in which case they could have been mis-sold.
Financial product mis-selling resulting in consequential loss
As a consequence of a business being mis-sold a financial product, sometimes that company may suffer an indirect financial loss, as well as losses that can be attributed directly to the mis-sold product. This could include things such as losing out on business opportunities or having increased business costs as a result of the mis-sold product, along with any overdraft changes or other penalties the business has incurred due to the financial strain caused by a product that wasn’t right for them.
Consequential loss can be added to a compensation claim for the direct losses cause by the mis-selling of the financial product, but it can be difficult to gather the necessary evidence for this for the claim to be successful under financial mis-selling law. With significant experience in this area, Stephensons are ideally placed to help businesses with this and striving for the best possible outcome every time. Get in touch today by calling our team on 0161 696 6170.