FCA Authorised expert, Martin Berkeley was interviewed by BBC Radio Wales flagship current affairs programme, Good Evening Wales, on the day of the House of Commons debate about IRHP swap mis-selling. Mr Berkeley explains how Relationship Managers specifically targeted care homes, caravan park owners and farmers, particularly in Wales. Mr Berkeley explained how Wales was seen as an underexploited market with high levels of borrowing. Bank managers were targeted with identifying businesses that the banks could sell complex derivative based financial products to.
Mr Berkeley said these products were often fiendishly complicated and the full facts were rarely disclosed, hence why the FCA has found that 93% of the sales of these products were non-compliant. He also explains how many of the bank’s customers were relying on their bank for advice, but they were so complex that the local bank managers had to introduce colleagues from their investment bank to advise on these products.
Mr Berkeley tells BBC Radio that these products were often sold as ‘cost-free’ which, unfortunately as many customers have found out, that this often means that there is a huge cost, but just hidden.
Mr Berkeley said that the longer the FCA review process takes, the more businesses that may fall over and the redress scheme is taking longer than expected. When asked how much the redress process would cost the banks, he stated that the banks are being coy about the actual cost as this will affect their balance sheets and potentially their share price.
The BBC Radio interview can be heard in full here: