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Mis-sold Swap Scandal: Using Forensic accounting To Claim Back What Is Yours

It is easy, and perhaps somewhat unfair, to portray bankers as fat cats in suits drinking the luxurious milk afforded to them by their generous bonuses. But the ongoing mis-sold swaps scandal is doing little to quash this opinion, and it has reared its ugly head again.

Last year the Financial Conduct Authority (FCA) ordered banks to review 29,500 cases in which they purportedly mis-sold complex interest rate hedging products to businesses. They were meant to protect businesses against interest rate rises but ended up costing them dearly after the base rate was cut to a record-low of 0.5 per cent in March 2009.

UK banks ended up putting almost £4 billion aside for settlement payments for those who fell foul of the mis-selling, but the FCA has recently revealed that less than 40 per cent of this (£1.5 billion) has been claimed. Enter the forensic accounting team, which could be the key to businesses getting their hands on the money to which they are entitled.

There are two main factors to be considered when claiming back on mis-sold swaps. Firstly there is the basic redress, which offers a repayment of the costs of the swap. Secondly there are repayments for consequential losses; these can be at a flat rate of eight per cent, a flat rate of eight per cent plus pocket losses or a calculated loss of earnings that the company missed out on because of the mis-sold swaps. The latter is where things become more complicated and this is where forensic accounting can play an important role.

Crucially, the experts at Frenkels Forensics can calculate how much profit a business might have lost out on and work to help this sum be reclaimed. Indeed, with so much money available to repay those who have been deceived by the banks – and with much of this sat gathering dust, it would appear – it is vital that businesses and individuals look for expert help to get back what is rightfully theirs. This means not settling for the costs of the swap itself but also making sure the consequential loss of profits are also accounted for.

For help in claiming on mis-sold hedging products contact Frenkels Forensics for an expert and independent appraisal. We can help assist individuals, companies, lawyers, barristers and accountants in assessing just how much is owed.

Alternatively, if you’re looking for advice in any other aspect of forensic accountancy, then do get in touch via Twitter, Google+, LinkedIn or by visiting our website www.frenkels.com

By Vitek Frenkel – find me via Google+.