British banks are set to endure a new wave of compensation claims for the mis-selling of financial products after a regulatory body overturned two previous decisions.
The Financial Ombudsman Service (FOS) has decided to perform a u-turn on its earlier stance that small businesses who allege to have been wrongly sold interest rate swaps are not eligible for damages, the Daily Telegraph reports.
Earlier this week, two unnamed financiers - understood to be leading high street lenders - were ordered to pay six-figure sums of compensation to aggrieved customers due to this issue.
An investigation established that these banks had left companies facing unmanageable debt levels after putting their own profits before the needs of their customers.
For instance, FOS official Tony Boorman explained that in one such case, one of the financiers had sold interest rate swaps "primarily for its commercial convenience" while paying "little or no attention" to their client's requirements.
By Asim Shah