A LAW firm based in Bolton has secured £2 million for local businesses in compensation for mis-sold interest rate hedging products (IRHP) in the last three months.

In a practice also known as interest rate swaps, major banks exploited small and medium-sized businesses by presenting such agreements as an effective and necessary security against rising interest rates.

In fact, such agreements were highly complex financial models which were dependent upon varying interest rates.

The economic downturn proved to be the catalyst for interest rates to fall to an unprecedented level, leaving many SMEs paying excessive rates on their loans.

KBL Solicitors, in Mawdesley Street, Bolton, is now urging more affected businesses to come forward before the window of opportunity for claims closes.

Partner and head of commercial litigation at KBL, Michael Slater, said: “The banks collectively made billions as a result of the mis-selling of these products, whilst many SMEs, an essential part of the UK economy, were left facing insurmountable debts and in some cases, insolvent liquidation.

“It is only right that the banks are held accountable and those entitled to seek redress achieve just that.

“We have been dealing with all claims relating to the mis-selling of Interest Rate Swap Agreements for the past two years.

“We know that the banks are now beginning to focus on ‘consequential losses’ and the window concerning the mis-sale itself is closing fast.

“We have been dealing with all claims relating to the mis-selling of Interest Rate Swap Agreements for the past two years and know that the banks are now beginning to focus on ‘consequential losses’ and we anticipate the banks may wish to close this window sooner rather than later.”

Dave Jones, former Commercial Banking Director and now MD of PBM, providing strategic advice to SMEs, added: “The prohibitive breakage costs associated with these products were often not communicated to business owners at the time of sale.

“This left them unable to switch banks or take advantage of the historic interest lows that have been with us since March 2009.”

KBL is offering a review service to business and personal customers who may have taken, or been asked to take, an interest hedging product as part of a lending agreement from 2001 to now, including any products taken and repaid.

Mr Slater can be contacted for more information on 01204 527777.