Relief for Watton businessman Paul Adcock as bank mis-selling wrangle is settled
- Credit: Eastern Daily Press © 2012
A Norfolk business owner who spearheaded a campaign against banks mis-selling complex interest rate swap deals to small firms said he was looking forward to getting his company back on a firmer footing after finally settling his own long-running dispute.
Paul Adcock, managing director of Watton-based electrical retailer Adcocks, said he had settled a legal dispute with Barclays which will see the bank tear up a so-called interest rate derivative scheme which saw the business rack up more than £175,000 in bank charges.
Major banks including HSBC, RBS, and Lloyds TSB, all offered the derivatives product. But with rates falling to historic lows, many businesses were caught out by the policies and even pressured into buying them.
The settlement deal came as the Financial Conduct Authority (FCA) separately confirmed that 10 firms have agreed their own compensation deals, totalling £500,000, after 210 offers were sent out, with another 1,700 due to go out shortly.
Lenders have identified more than 30,000 cases of potential interest rate swap mis-selling since the end of 2001 and the FCA said around 85pc - more than 25,000 - sales are being reviewed.
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But the campaign group Bully-Banks, which Mr Adcock become a leading light of, said the FCA was not acting quickly enough to help businesses struggling with the financial impact of being mis-sold the products.
And business secretary Vince Cable accused banks of 'dragging their feet' in paying small businesses, given that compensation offers have only just started to be sent out to customers more than a year after the FCA first began looking at the swaps scandal.
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He said: 'Swaps mis-selling by the banks has been a tragedy for thousands of small businesses and it's appalling that banks are now compounding the scandal by dragging their feet over compensation. I expect significant progress to made rapidly and I will be meeting the regulator soon to press this case yet again.'
Mr Adcock said the business, which originally borrowed £970,000 as part of a 25-year deal, had been brought to the brink by the deal, and he was pleased it had been settled before it went to the courts.
'It's obviously a relief,' he said. 'We were one of the first people to stand up and shout about it. It's put us back in the position we would have been in had we not been mis-sold it in the first place. Now we can start rebuilding the business - we've got to instil confidence back into our customers, and one of the first jobs is to write to them thanking them for their support.'
He added: 'We had to cut back on staff, and we had so little stock in the store, it looked like we were having a closing down sale. But the support we had from other small electrical businesses really helped us out.'
And he said that a change in philosophy at Barclays had also helped restore the firm's relationship with the bank and helped stabilise the business.
Martin Wheatley, chief executive of the FCA, said: 'With 85pc of cases now under review, banks have made progress.
'But like the thousands of affected small businesses, we want to see redress paid quickly to those who have suffered loss as the result of mis-selling.'