LORD Alan Sugar has emerged as the highest-profile victim of mis-selling of interest rates hedging products by British banks.
The star of BBC TV's The Apprentice, who made his fortune from Amstrad computers, has complained to Lloyds Banking Group asking for the return of some £10 million in break fees paid to cancel a product.
It is reported the Labour peer had secured the £97m derivative to protect against the rise in interest rates on a Lloyds loan taken out against part of his property empire.
Lord Sugar and Lloyds have both declined to comment but Lord Sugar is, according to reports, prepared to be considering legal action if his complaint is unsuccessful.
Thousands of small firms were also sold complex derivatives to shield them from interest rate changes on business loans from their banks.
The products have ended up costing them thousands or even millions of pounds.
Last year Lloyds and other major lenders signed up to a deal with the Financial Conduct Authority or FCA, the industry watchdog, to redress victims.
Barclays alone has set aside £1.5bn. Lloyds, which is partly owned by the state and includes the Bank of Scotland, has provision of £400m to meet compensation claims.
However, banks have still to pay out on compensation claims and MPs are campaigning for the FCA to speed up the process. The FCA believes that the products, partly because of their complexity, were mis-sold.
The products fell in to three broad categories: swaps, which enabled customers to fix their rates; caps, which limited rises; and different types collars, which mitigated against fluctations.
Lord Sugar is thought to be worth more than £700m.
He is not eligible for an FCA scheme to get small and mid-sized firms redress for mis-selling of interest rates hedging products.
The hedging product mis-selling scandal came on top of banks offering individuals payment protection insurance or PPI, which is also believed to have been widely mis-sold. Compensation for these deals are also costing banks millions.
Barclays, HSBC, Lloyds and RBS have all stopped marketing the products.
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