Deadline looms for responses to financial scandal review

Time is running out for farmers to lodge a complaint about mis-sold financial products that forced businesses into unsustainable debt.

The deadline for complainants to have their say on what was known as the Interest Rate Hedging Products scandal is 14 December 2022.

Hundreds of farmers lost their farms, land and other property because they unwittingly committed to borrowing that had hidden costs.

See also: Bank destroyed my business, says livestock farmer

When business owners switched to new deals with capped, collared or fixed rates, lenders attached a hidden sum known as margin lines of credit.

About 30,000 such products were sold.

Despite being undeclared by the lenders, the sum was secured against capital and interest rates could be adjusted upwards.

For some farms the amount owed spiralled while their credit score plunged. The first thing many farmers knew about the issue was when they were refused further credit.

The issue came to light when banks realised that they had transgressed the Fraud Act 2006. A Financial Conduct Authority (FCA) investigation that followed in 2012 found that mis-selling had taken place and some farmers then received a small amount of compensation.

However, complaints were lodged that this review and the following compensation failed to satisfactorily close the issue.

The review procedure itself was subjected to a lessons learned initiative, led by barrister John Swift.

His report, published on 14 December 2021, opened the door for those affected by the scandal to lodge complaints. The 12-month deadline – 14 December 2022 – for those complaints to be lodged is now fast running out.

Latterly, the Swift review has also drawn complaints about its scope and findings.

Farmer Paul Davey, who lost about £2m in land and property to one of the schemes, urged anyone affected to lodge a complaint to keep the procedure alive.

Many critical matters may have been overlooked by farmers who went through the FCA review and it is important for everyone to make their voices heard before the deadline closes.

This applied to the families of victims and even those who had already been compensated but felt their redress was inadequate, Mr Davey said.

The issue has been championed by the Transparency Taskforce, which has created a pro-forma letter that can be signed with few additional details and emailed, making the action simpler, he said.