Review of interest rate hedging products | Royal Bank of Scotland

Review of interest rate hedging product sales (IRHPs) Progress update

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All updates Review of interest rate hedging product sales (IRHPs) Progress update
Accordion

Icon expand 9 February 2015

Royal Bank of Scotland was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and 29 June 2012. We have now completed the reviews for all customers who joined the process before March 2014.

To date we have*:

  • written to 8,721 customers 100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • reached 8,259 provisional conclusions
  • sent 8,313 initial outcome letters
  • made 4,618 payments

*(All numbers stated are correct as of 31st January 2015)

 

Opting in to the review

If you have an Interest Rate Cap product (Category C), you are not automatically included in the review.

The FCA have made the following comment -

"Customers who purchased cap products were contacted by the banks and advised that these sales would only be included in the review if they proactively complain to their bank. We remind customers who have yet to do so that they should contact their bank if they want these sales will be included in the review. To make a complaint to their bank, contact details can be found on the banks’ websites, or alternatively, customers can raise their concerns with their banking relationship manager.

So far, 1,000 out of 7,000 customers have complained to their banks about their cap products.

The level of complaints from customers who purchased caps has now fallen to a level (100 in the last six months) where it is appropriate for the banks to resume dealing with new complaints through their usual complaints handling processes. Therefore, for those customers who purchased caps, the final date when complaints will be considered within the IRHP review will be 31 March 2015.

After this date customers still have the following options (subject to time limits for making a complaint or bringing a claim):

To complain about the sale of their IRHPs through the banks’ usual complaints handling processes; To refer their complaint to the Financial Ombudsman Service. Generally customers who are private individuals can bring complaints to the Financial Ombudsman Service, as can businesses that are 'micro enterprises' (an EU term covering smaller businesses) as long as they have an annual turnover of less than two million euros, or approximately 1.59 million pounds, and fewer than ten employees; To pursue their case through the courts.
If you have purchased a cap product and wish to complain, we urge you to do it as soon as possible and in any event before 31 March 2015."

If you have one of these products which you believe should be included in the review then we would ask that you contact us in writing stating the reasons why you believe this product was mis-sold, providing as much written evidence as possible. Please contact us using one of the methods below.

For further information about the review process, please refer to our FAQs.

If you have any questions, please contact your case handler in the first instance. These details will be found on the Initial Offer letter that was sent to you, where applicable. If you are unable to contact them or you have a general enquiry you contact us - ;

The FCA advised in June 2014, for customers who have a Category B IRHP, they will no longer be able to opt in to the review process, except under exceptional circumstances.

Review outcomes

Our focus remains on completing the review and making redress payments, where they are due. We would urge you to contact us if you have received an initial outcome letter or initial assessment letter and have yet to respond. It is important for you to engage with us or accept the offer, otherwise your opportunity to claim for any additional losses (consequential losses) may cease. Please contact your dedicated case handler in the first instance or if you have a more generic question’s then please contact us using one of the methods below.

Additional Losses

As part of the review, we agreed with the FCA to pay 8% annual simple interest on any redress payments to reflect any lost opportunities. If you believe your lost opportunity amounts to more than 8% simple interest you can put a claim together for consequential loss. These claims are then assessed by the review team and reviewed by the Independent Reviewer. Consequential losses are assessed by reference to established legal principles relating to claims in tort and breach of statutory duty. In broad terms they are:

  • The mis-sale must have caused the loss (i.e. the loss would not have happened had it not been for the bank’s sales standard breaches).
  • The loss must not be too “remote”. That is, the loss must have been a reasonably foreseeable outcome of the bank’s regulatory breaches (i.e. the bank could have reasonably foreseen that its regulatory breaches could result in those losses).
  • Only claims that are supported by evidence will be considered. For example, documents that were created at the time the loss was suffered are likely to be very relevant.

There is no exhaustive list of types of loss that can be claimed as consequential loss (assuming they meet the legal tests). However, the FCA have set out some of the more frequent claims that have seen so far and clarify some of the more common misunderstandings about what can be claimed. For more information visit the FCA website.

For each consequential loss claim, the onus is on you the customer to demonstrate that the ‘legal tests’ are met. Customers should note that claims for consequential loss will take longer to review. We will keep you informed of the progress and will contact you should we require additional detail.

 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

Accordion

Icon expand 8 December 2014

Royal Bank of Scotland was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and 29 June 2012. We have now completed the reviews for all customers who joined the process before March 2014.

To date we have*:

  • Written to 8,713 customers 100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • reached 8,259 provisional conclusions
  • sent 8,259 initial outcome letters
  • made 4,324 payments
  • received acceptances from  70% of  our customers

*(All numbers stated are correct as of 30th November 2014)

Review outcomes

Our focus remains on completing the review and making redress payments, where they are due. We would urge you to contact us if you have received an initial outcome letter or initial assessment letter and have yet to respond. It is important for you to engage with us or accept the offer, otherwise your opportunity to claim for any additional losses (consequential losses) may cease. Please contact your dedicated case handler in the first instance or if you have a more generic question’s then please contact us using one of the methods below.

 

Additional Losses

As part of the review, we agreed with the FCA to pay 8% annual simple interest on any redress payments to reflect any lost opportunities. If you believe your lost opportunity amounts to more than 8% simple interest you can put a claim together for consequential loss. These claims are then assessed by the review team and reviewed by the Independent Reviewer. Consequential losses are assessed by reference to established legal principles relating to claims in tort and breach of statutory duty. In broad terms they are:

  • The mis-sale must have caused the loss (i.e. the loss would not have happened had it not been for the bank’s sales standard breaches).
  • The loss must not be too “remote”.  That is, the loss must have been a reasonably foreseeable outcome of the bank’s regulatory breaches (i.e. the bank could have  reasonably foreseen that its regulatory breaches could result in those losses).
  • Only claims that are supported by evidence will be considered.  For example, documents that were created at the time the loss was suffered are likely to be very relevant.

There is no exhaustive list of types of loss that can be claimed as consequential loss (assuming they meet the legal tests). However, the FCA have set out some of the more frequent claims that have seen so far and clarify some of the more common misunderstandings about what can be claimed. For more information visit the FCA website.

For each consequential loss claim, the onus is on you the customer to demonstrate that the ‘legal tests’ are met (see below). Customers should note that claims for consequential loss will take longer to review. We will keep you informed of the progress and will contact you should we require additional detail.

 

Opting in to the review

The FCA advised in June this year, for customers who have a Category B (insert link to IRHP descriptions of FCA website), IRHP, they will no longer be able to opt in to the review process, except under exceptional circumstances.

If you have an Interest Rate Cap product (Category C), you are not automatically included in the review. The FCA have made the following comment “We remind customers who purchased caps that these sales will be included in the review only if they proactively complain. So far, 1,400 out of 7,400 customers have complained about caps. If you have purchased a cap product and wish to complain, we urge you to do it as soon as possible.” For further information visit the FCA website.

If you have one of these products which you believe should be included in the review then we would ask that you contact us in writing stating the reasons why you believe this product was mis-sold, providing as much written evidence as possible. Please contact us using one of the methods below.

For further information about the review process, please refer to our FAQs.

If you have any questions, please contact your case handler in the first instance. These details will be found on the Initial Offer letter that was sent to you, where applicable. If you are unable to contact them or you have a general enquiry you contact us - ;

 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority

Accordion

Icon expand 31 August 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012. Due to the large number of SME customers we deal with, Royal Bank of Scotland is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,670 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 0% of customers we have contacted
  • currently reviewing 14 in scope sales (%)
  • reached 8,248 provisional conclusions
  • sent 8,199 initial outcome letters
  • made 3,036 payments

(All numbers stated are correct as of 31st August 2014)

If you have any questions please contact us by;

  • Post: IRHP Review Team, PO Box 70749, London, EC2P 2LY
  • Email: DerivativesCustomerExternalEmail@rbs.co.uk
  • Phone: +44 (0)800 056 7100 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority

Accordion

Icon expand 31 July 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012. Due to the large number of SME customers we deal with, Royal Bank of Scotland is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,659 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 0.2% of customers we have contacted
  • currently reviewing 11 in scope sales (%)
  • reached 8,235 provisional conclusions
  • sent 8,001 initial outcome letters
  • made 2,771 payments

(All numbers stated are correct as of 31st July 2014)

If you have any questions please contact us by;

  • Post: IRHP Review Team, PO Box 70749, London, EC2P 2LY
  • Email: DerivativesCustomerExternalEmail@rbs.co.uk
  • Phone: +44 (0)800 056 7100 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

 

Accordion

Icon expand 30 June 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012. Due to the large number of SME customers we deal with, RBS is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA, and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,655 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 0.3% of customers we have contacted
  • currently reviewing 83 in scope sales (1%)
  • reached 8,142 provisional conclusions
  • sent 7,748 initial outcome letters
  • made 2,402 payments

(All numbers stated are correct as of 30th June 2014)

 

If you have any questions please contact us by:

  • Post: IRHP Review Team, PO Box 70749, London, EC2P 2LY
  • Email: DerivativesCustomerExternalEmail@rbs.co.uk
  • Phone: +44 (0)800 056 7100 

 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

Accordion

Icon expand 31 May 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012. Due to the large number of SME customers we deal with, RBS is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,645 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 1% of customers we have contacted
  • currently reviewing 99 in scope sales (1%)
  • reached 7,785 provisional conclusions
  • sent 7,273 initial outcome letters
  • made 2,090 payments

(All numbers stated are correct as of 31st May 2014)

 

If you have any questions please contact us by:

  • Post: IRHP Review Team, PO Box 70749, London, EC2P 2LY
  • Email: DerivativesCustomerExternalEmail@rbs.co.uk
  • Phone: +44 (0)800 056 7100

 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

Accordion

Icon expand 30 April 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012. Due to the large number of SME customers we deal with, RBS is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,636 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 5% of customers we have contacted
  • currently reviewing 223 in scope sales (2%)
  • reached 7,017 provisional conclusions
  • sent 5,773 initial outcome letters
  • made 1,769 payments

(All numbers stated are correct as of 30th April 2014)

If you bought an IRHP after December 2001, your sale will potentially fall within the scope of this review. If you have not yet heard from us, please be assured we are committed to communicating with all affected customers by the end of 2013. If we inform you that your sale may be eligible for review your interaction is key to us achieving a swift outcome so, should you wish to opt in it is very important that you do so as quickly as possible (where appropriate) and contact us to arrange to provide any additional information you feel may assist us with your review.

 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

Accordion

Icon expand 31 March 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012. Due to the large number of SME customers we deal with, RBS is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,624 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 5% of customers we have contacted
  • currently reviewing 561 in scope sales (6%)
  • reached 6,758 provisional conclusions
  • sent 4,635 initial outcome letters
  • made 1,300 payments

(All numbers stated are correct as of 31st March 2014)

If you bought an IRHP after December 2001, your sale will potentially fall within the scope of this review. If you have not yet heard from us, please be assured we are committed to communicating with all affected customers by the end of 2013. If we inform you that your sale may be eligible for review your interaction is key to us achieving a swift outcome so, should you wish to opt in it is very important that you do so as quickly as possible (where appropriate) and contact us to arrange to provide any additional information you feel may assist us with your review.

 

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

Accordion

Icon expand 20 February 2014

Royal Bank of Scotland Group was given approval by the Financial Conduct Authority (FCA)* at the beginning of May 2013 to commence the review of non sophisticated retail designated customers sold an IRHP between 1st December 2001 and end of June 2012 . Due to the large number of SME customers we deal with, RBS is in the process of reviewing more IRHP sales than any other bank.

We wish to ensure a speedy process for all customers and an agreeable outcome to be reached as quickly as possible. Accordingly over the last 4 months we have been writing to the customers involved, advising them about the review and inviting them to provide information about their sales. We have then used this information along with our records, in a process agreed by the FCA and overseen by an Independent Reviewer approved by the FCA, to assess whether each sale fully met the relevant regulatory requirements and whether any redress is due.

As you can appreciate, there is a great deal of detail to work through. In order for us, where appropriate, to offer redress as quickly as possible, we would be grateful if customers responded promptly to our letters relating to the review.

To indicate the progress we are making, we will be providing updates on this page of our website for your information.

To date we have:

  • written to 8,624 customers (100% of in scope sales in the review) who bought an IRHP in the relevant period to inform them whether their sales are eligible for review
  • we are currently awaiting responses from 8% of customers we have contacted
  • currently reviewing 1,848 in scope sales (20%)
  • reached 5,585 provisional conclusions
  • sent 3,379 initial outcome letters
  • made 850 payments

(All numbers stated are correct as of 28th February 2014)

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential Regulation Authority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority.

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0800 056 7100

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The IRD Review Team, PO BOX 70749, London EC2P 2LY

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