Hartlebury and Wyre Forest MPs raise financial scandal issue in Commons (From Kidderminster Shuttle)
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Hartlebury and Wyre Forest MPs raise financial scandal issue in Commons
7:10am Tuesday 29th October 2013 in News
HARTLEBURY’S and Wyre Forest’s MPs have said it is time to act with greater urgency on a financial scandal they say is affecting many Worcestershire businesses.
During a debate in the Commons last Thursday, Peter Luff and Mark Garnier, Conservatives representing Mid Worcestershire and Wyre Forest, respectively, agreed many “excellent” local businesses were facing difficult times or even closure if they did not receive compensation soon for the scandal.
Mr Luff 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.”
He explained: “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 Mr Luff said: “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.”
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