BANKS have now paid out £1.5 billion in redress for the mis-selling of complex loans to small and medium-sized businesses, with 10,000 customers having accepted an offer.
They are now likely to wind up the compensation scheme by the end of the year, two-and-a-half years after it was first announced, the Financial Conduct Authority has said.
The FCA said all nine banks involved in the scheme have now completed their sales reviews for customers who responded before March 2014, and have delivered redress letters to most of them.
The banks have made 14,000 offers of cash redress, while 3,000 SMEs were told the sale complied with FCA rules or resulted in no loss.
Since March, around 1,500 customers have opted to join the review, with four-fifths of the cases determined.
The regulator said: "The banks will also continue to assess customer claims for consequential loss. Every redress offer has eight per cent simple interest per year added, but those who can demonstrate their losses exceeded that can submit a consequential loss claim. As of September, 2,965 customers have submitted a consequential loss claim, half of which have been assessed. The banks have paid out £5m for these claims so far."
The average offer for consequential loss, at less than £1,700, has been criticised by SMEs as inadequate and reflecting a high legal bar set by the banks, with campaign group Bully Banks alleging that the smaller the claim, the more likely the banks have been to settle it.
Edinburgh law firm MBM Commercial has said the scheme was flawed from the outset because "the banks were put in charge of reviewing their own wrongdoing".
Meanhile English law firm Slater Gordon, with 300 cases, has said the presence at meetings of independent reviewers paid by the FCA was "purely procedural".
The FCA responded that independence from the banks had been ensured by third party reviewers, with all decisions "signed off by someone at partner, or partnership equivalent, level".
Meanwhile no avenue of redress has yet been offered to thousands of firms which were sold fixed rate loans classed as commercial and unregulated, despite having similar features to regulated derivative-linked loans.
Many have appealed to the Financial Ombudsman Service, where cases have typically been more than a year in the process.
The FOS is understood to have issued its first few provisional adjudications on Clydesdale Bank cases, almost all in favour of the businesses on the grounds that the bank failed to warn customers of the potentially damaging effect of break costs linked to derivatives.
John Glare, secretary of the NAB Customer Support Group, said the group was now looking to the Treasury Select Committee to recommend a full review process for unregulated derivative-linked loans.
Other legacy issues still haunting banks include payment protection insurance (PPI) mis-selling, the rigging of the benchmark Libor interest rate, and foreign exchange manipulation.
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