BUSINESSES in Bolton affected by the so-called “rate swap” mis-selling scandal have until the end of March to register to be part of a review scheme.

A review was launched in 2012 by the Financial Conduct Authority (FCA) into the mis-selling by the banks of Interest Rate Hedging Products (IRHPs).

The banks announced they had agreed with the FCA to review the sale of all IRHPs sold from 2001. IRHPs were often included by the Banks as conditions of sanction of lending facilities.

This followed concerns expressed by the FCA after a pilot review of these products revealed that over 90% had not complied with the sale standards agreed with the FCA.

The full review commenced in may 2013 and the FCA said last week that the banks have sent a basic redress determination letter to those customers reviewed to date where the sale of the product has been found to be miss-sold.

The FCA have now announced that the final date for new entrants to join the IRHP review scheme will be the 31st march 2015.

The decision to include a business customer in the review process is determined by some arbitrary criteria , for example, 6.5m annual turnover or £3.2m assets on the balance sheet .

Any business outside the criteria is categorised as ‘sophisticated’ and is consequently not offered a review of their product.

Dave Jones, managing director of Bolton’s Progressive Business Mentoring and a former regional commercial banking director said has been heavily active in seeking recompense for miss-sold IRHPs, he said: “Many of the businesses categorised as ‘sophisticated’ in this process are as unlikely to have fully understood the implications of these complex products as those SMEs deemed ‘non sophisticated’ that are included in the review process.

“If a ‘sophisticated’business believe they have a case for redress , then their route is via the complaints process of the bank that sold them the product.

“In my experience, the banks response times reflect the fact they are directing their energies to those included in the formal review process but that should not discourage any business owner in submitting a complaint where they have an obvious case.”

Michael Slater, head of litigation at KBL Solicitors in Bolton said: “‘As a firm we have been successful in obtaining redress for a number of local businesses, involving most of the High Street banks. “Following a successful redress award we then sit down with the client to assess any case for consequential loss – what opportunities or profit were lost by the business during the period they were locked into their excessive funding costs — this is firmly evidence based and requires a structured case to be put forward on behalf of the client.”

For those SMEs included in the review process to date, 75% have been found to be miss-sold with the redress/compensation averaging c£150k per claim.

This leaves the total redress paid out by the banks to date at £1.8b, which includes £365m in respect of consequential losses.

Following the March 31 closure date, any complaints in respect of the sale of IRHPs, whether the SME falls into the ‘sophisticated’ or ‘non sophisticated’ category, will need to be directed to the complaints department of the respective bank. By its nature, this is likely to prove a more time consuming route than the current review process.