We know that RBS in particular has ignored the requirements of the rules of the FCA Redress Scheme specified in the attachments to the FCA’s letter of 29th January 2013. (That failure to properly determine whether a Legitimate Condition of Lending had been established is summarized in Nick Stoop’s Report http://www.warwickriskmanagement.com/warwick-risk-management-report-about-the-fca-review.html)
As a result, the basic redress determinations by RBS for thousands of SMEs involving a ‘Swap-for-a-Swap’ (either a cap or another IRHP) are incorrect. We know that to be the case and we believe that RBS knows it to be the case. This affects many businesses that have already entered into full and final settlements with RBS and indeed other banks.
We are starting to hear of RBS tearing up full and final settlements previously agreed with SMEs on the basis of ‘Swap-for-a-Swap’ and then tearing up the original IRHPs sold to the SMEs. The affected businesses will receive a full refund of all the monies paid under their IRHP. There are very small numbers of SMEs affected at the moment but logically there should be thousands because RBS has made thousands of basic redress determinations on an incorrect basis.