TIME TO ACT TO PROTECT LOCAL FIRMS HIT BY FINANCIAL SCANDAL SAYS MP
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TIME TO ACT TO PROTECT LOCAL FIRMS HIT BY FINANCIAL SCANDAL SAYS MP

Worcestershire MPs have said it is time to act with greater urgency on another financial scandal – this one affecting many county businesses.

During a debate in the Commons on Thursday, Peter Luff and Mark Garnier, MPs for Mid Worcestershire and Wyre Forest, agreed that many excellent local businesses are facing difficult times or even closure if they do not receive compensation soon for the scandal.

Peter contributed to the debate saying,

“This scandal, although apparently technical, is affecting well run, long-established and deeply respected real businesses across a wide range of sectors, and (this) delay is going to kill businesses that our constituents value very deeply indeed”

Peter explains,

“The issue is the mis-selling of products called interest rate derivatives to small and medium businesses. Banks often failed to explain the issues around these products, made them a condition of a much needed loan, or just inserted the provisions at a late stage in a long negotiation without bothering to inform the customer properly. If advice was offered, the risks of these products were rarely explained, only the apparent protection against interest rate increases. The consequences if interest rates fell were often just not set out to customers. As a result many businesses have lost large sums and become uncompetitive as interest rates fell.

“Last year a scheme was put in place to compensate businesses that were mis-sold these so-called “hedging products”. However getting the compensation they are due is taking a painfully long time and many businesses tell me they are suffering badly – or are even excluded from the compensation scheme on technicalities.”

A debate was organised in Parliament to put pressure on the banks and regulator to act and business owners from Worcestershire were among those in the public galley to hear what was being said.

After the debate Peter commented,

“An increasing number of businesses in my constituency have been in touch with me about this. It is completely unacceptable that businesses are having to wait such a long time for the compensation that they deserve.

“I hope that the well-attended Parliamentary debate will put further pressure on the banks and on the Financial Conduct Authority to move much more quickly. Progress is only being made at a snail’s pace at present, threatening the viability and jobs of some very well-known firms in the county.”

ENDS


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