British banks may face another wave of compensation claims regarding the alleged mis-selling of products in the near future, it has emerged.
According to the Daily Telegraph, the Clydesdale and Yorkshire Bank group has informed its customers it could expand the list of products for which it will consider awarding damages if they have been retailed incorrectly.
For instance, the financier will examine whether or not compensation claims would be valid for deals involving the sale of complex interest rate derivatives to small businesses.
This could exert pressure on other banks to follow suit and if lenders do opt to take a similar course of action, tens of thousands more compensation claims may be launched.
Data from the Financial Services Authority shows that in excess of 40,000 interest rate swaps have been sold to smaller companies and an industry observer said this process started by the Clydesdale and Yorkshire Bank may "massively increase" financers' compensation bills.
By Tony Aynsley