MBM Commercial says it has successfully claimed almost £6 million in redress for clients, but one claim in three has yet to receive an offer, in some cases 12 months after the "fact-find" meeting. Most of the firm's cases are with RBS, which was said by the regulator two months ago to have a small backlog of cases.
Cat McLean, partner with MBM Commercial, said the review had treated similar claims inconsistently. "Some clients have had quite significant six-figure offers, others have been offered £50,000." She added: "Clients who didn't know what a 'swap' was have been told that they wanted one. Others who were forced to break swaps to maintain their banking facilities have been told they chose a new swap."
Claimants may have been refused redress because they answered 'yes' to the set question 'are you risk averse?' in their interview, Ms McLean said. "There was a specific list of questions designed to eliminate people from the review process, and if you said you were risk averse that was not the right answer. It sounded self-serving for us to say so but you needed someone who understood the process."
The FCA has always maintained that claimants did not need advisers. But businesses who believe they suffered significant consequential losses have come up against a high legal threshold, and been told that the norm will be only the 8 per cent annual (simple) interest paid on primary losses. The FCA said last month that 2,400 businesses had made claims for consequential losses, 600 of which had been paid, with an average payout of £1,700.
Ms MacLean said: "Across the board the banks are running a very hard line on consequential losses."
She went on: "I don't believe the review process has really done what the FCA wanted it to do. It was sold to the public as a proper, independent review, but right from the outset the banks were put in charge of reviewing their own wrongdoing."
Campaign group Bully Banks has complained that the smaller the claim, the more likely the banks have been to settle it, while English law firm Slater Gordon with 300 cases has said the presence at meetings of independent reviewers paid by the FCA was "purely procedural".
Ms MacLean said: "Our experience is that the reviewers were simply there to audit the process, they took no part in decisions. A lot of people believed there was going to be independent scrutiny but the process was fundamentally flawed."
David Cross at the FCA said: "We have been keenly aware of the need to make this redress scheme independent. That is why we put in place third party reviewers, who answer to us, to look individually at each case and make a final decision on what redress is offered."
RBS said: "We are committed to processing all cases as quickly as possible and to ensuring that all those that were mis-sold these products get fair and reasonable redress."
Meanwhile the first decisions from the Financial Ombudsman Service on the mis-selling by Clydesdale and Yorkshire banks of 'embedded swap' loans, which fell outside the regulatory review, are thought to be imminent. The NAB-owned banks told the Treasury Committee in June they were dealing with 550 mis-selling claims and expected to pay redress in 60 per cent of cases.
Consequential loss claims, however, may be unsuccessful. Jim McGrory, a St Andrews hotelier, is claiming total losses resulting from mis-selling of over £500,000 but the Clydesdale is offering £173,000 - above the maximum £150,000 which the Financial Ombudsman Service can require rather than only recommend the bank to pay out, but equivalent to primary losses plus 8 per cent interest. The bank has said Mr McGrory's claim for £335,000 in tax and trading losses, on properties that were sold prematurely because his business was locked into its loan by breakage penalties and could not refinance, ignores macro-economic and management factors and the problem of 'foreseeability'.
In its provisional adjudication in Mr McGrory's favour, the FOS urged the bank to pay out the full sums in refund and redress, but said there was not "incontrovertible evidence" that his further losses were a direct consequence.
The bank has this week told the businessman that the FOS determination was "clear and precise and the bank wishes to settle on that basis".