Over the last 4-6 weeks we have started to see an increase in the number of offers of redress being offered by the Banks.
As a rule, the Banks are first making basic awards and then asking affected customers to submit any consequential loss claims.
The Banks are offering basic redress on two bases: the majority of clients for whom we have compiled letters of complaint are receiving tear-up offers i.e. repayment of all sums paid under the IRHP which was entered into; we are aware of some customers, however, who are being told by their Bank that an alternative IRHP would have been sold to them and who are consequently receiving awards reflecting the difference between the interest they ended up paying under the IRHP actually taken out and the interest that would have been paid under the alternative product – usually this produces a positive offer of redress but in some cases the Banks are stating that customers in fact owe the Bank money. It is difficult to see how such offers constitute fair and reasonable redress for customers.
Whilst some affected customers undoubtedly have issues with offers of basic redress, the main battle ground in the coming months is going to centre around the resolution of potentially significant consequential loss claims.
The starting position with consequential loss claims is that the Banks and the FCA have agreed the criteria that the Banks are to apply when considering these claims but customers have no way of finding out what these criteria are so run the risk of failing to tick the right boxes if they put in a claim for consequential losses.
Consequential loss claims are complex and expensive to formulate properly so before deciding to commit to what can be a significant legal spend, it is sensible to carry out a cost/benefit analysis at the outset to determine whether such claims should be prepared.
If a consequential loss claim is to be pursued then in order to maximise the chances of obtaining compensation – and for many the FCA Review is likely to be the only opportunity to obtain redress - the report which is ultimately produced to the Bank, as with the initial letter of complaint, must be comprehensive and robust. In order to support the claim for consequential losses properly input from both lawyers and forensic accountants is essential.
If you want to know whether you should be making a claim for consequential losses having been mis-sold an IRHP, feel free to contact me, Dominic Blakeley, on 0113 336 3365 or via email firstname.lastname@example.org.
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