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IRSA and Embedded Swaps

The Issue

Interest Rate Swap Arrangements (IRSA) and Tailored Business Loans (Embedded Swaps) are complex financial packages that shouldn’t have been sold to some small businesses. At the time of sale many customers weren’t told about all the fees or the potential financial penalties, if they tried to change or end the agreement. Sometimes the banking staff selling these products didn’t understand the complexity of the products themselves.

Figures from the Financial Conduct Authority (FCA) show that by June 2015, nine UK banks had identified 17,600 businesses which were mis-sold products.

Action FSB have taken

  • When the scandal broke in 2013 we called for compensation for affected small businesses.
  • We took our member’s evidence directly to the Government to illustrate the impact of the problem on small businesses.
  • In October 2013 we criticised the small number of businesses (32) that had received compensation from their bank, under the FCA redress scheme.

Our Goal

Small businesses knowingly or unknowingly mis-sold financial products by banks, should receive swift and proper redress. We want all types of businesses to change schemes, where staff are incentivised to sell products that are inappropriate for a customer. Customers should be informed about what they’re purchasing.

Achievements in...



  • We remain in regular touch with the Government and the FCA to ensure all complaints and offers of redress (where applicable) are dealt with swiftly.
  • In June 2015 the FCA says 12,600 businesses have accepted a compensation offer.
  • The FCA says £2 billion is being paid out to small businesses.
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