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Frequently asked questions

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Find answers to frequently asked questions about the interest rate hedging products (IRHPs) review.

You can also see the FCA’s answers to some of the most commonly asked questions on their

 

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  • What products are in scope of the review?

    The review will cover sales of IRHPs entered into after 1st December 2001. These products include

    - Collars: which enable customers to limit interest rate fluctuations to within a simple range.

    - Structured collars: which enable customers to limit interest rate fluctuations to within a specified range, but involves arrangements where, if the reference interest rate falls below the bottom of the range, the interest rate payable by the customer may increase above the bottom of the range.

    - Fixed rate swaps: which enable customers to 'fix' their interest rate.
    The review will not include interest rate caps (which place a cap on any interest rate rise) unless the purchaser complains to Barclays about its sale during the course of the review.

    Which customers are in scope of the review?

    Only customers classified as “retail clients” or “private customers” are in-scope of the review. Of these, only customers who are assessed to be “non-sophisticated” will be included in the review.

    Barclays will assess the sophistication of all in-scope retail clients and private customers to see if they meet the FCA’s “sophisticated” criteria.

    How will Barclays determine who is a ‘sophisticated’ and who is a ‘non-sophisticated’ customer?

    Barclays will be applying the FCA’s criteria to determine which customers are ‘sophisticated’, and which are ‘non-sophisticated’. This criteria was revised by the FCA following their assessment of the pilot exercise to ensure the review is focused on those small businesses that were unlikely to understand the risks associated with these products.

    For a full explanation of the Sophisticated Customer Criteria including what has changed, please see the FCA’s policy document. This can be found on their website (PDF 500KB, new window).

    If you would like to see how your business would be classified for the purposes of the review, you can go to the FCA’s flowchart (PDF 205KB, new window).

    What has changed between Pilot and Main?

    The most notable change was the FCA’s decision to revise the sophisticated customer criteria, however for a full explanation of what has changed, please see the FCA’s policy document. This can be found on their website (PDF 500KB, new window).

    How will I know when I enter the review process?

    When we have completed your sophistication assessment, according to the criteria agreed with the FCA, we will send you a letter that will either let you know you are:

    a) Non-sophisticated, and therefore in-scope of the review. All relevant next steps will be clearly outlined for you in the letter.
    OR

    b) Sophisticated, and therefore out of scope of the review.

    However, customers who purchased structured collars do not have to opt into the review, and therefore will be asked by Eversheds or TLT if they wish to participate in a fact find.

     

  • What is the role of the Independent Reviewer?

    The Independent Reviewer will be providing independent oversight to each review, in accordance with the methodology agreed between Barclays and the FCA. In addition they will confirm the appropriateness of the outcome achieved for each customer.

    Barclays has appointed KPMG LLP as the Independent Reviewer to oversee the review, and Deloitte LLP as a second Independent Reviewer to review those cases where a customer has a connection with KPMG which might result in KPMG having a conflict of interest. In the event that neither KPMG nor Deloitte are able to act, Barclays will appoint an additional independent Reviewer.

    How does the change in Financial Services Authority (FSA) to Financial Conduct Authority (FCA) affect my review?

    The change does not affect your review in any way. Barclays will continue to conduct the review in line with the agreement that was made with the FSA, but going forwards the process will be overseen by the FCA.
     

  • When will I enter the review process?

    All our in scope customers have now been invited to participate in the review process and to inform them of any next steps. Those who have opted in will have already entered the review process.

    Is there a deadline to enter the review?

    The FCA has recently announced that the deadline for eligible customers to enter into the review is the 31 March 2015. If you contact Barclays after 31st March 2015, the sale of your IRHP cannot form part of the review and will be considered under our usual complaints handling procedure.

    How many people does Barclays have working on the review process?

    Barclays has dedicated resources to the review in order to deliver results as swiftly as possible for customers and meet its aim of completing the review within the timescale set out by the FCA.

    How long will the review last?

    Barclays is committed to prompt resolution of the review and as a result has devoted sufficient resources to enable it to be completed within the timeframe set out by the FCA. However, this timeframe does depend on each customer responding in a timely manner in order to enable us to progress each case.
     

  • Should I use a claims management company or law firm?

    You may be approached by claims management companies offering to assist you in the FCA’s IRHP review in return for a significant fee or percentage of any monies that are paid to you as part of this review. Some of these may claim to have special knowledge of Barclays, but please be aware that they have no connection with Barclays whatsoever.

    The review has been deliberately designed to be straightforward, customer-centric and transparent. It is also overseen by Independent Reviewers. Therefore the FCA has said that customers do not need to use claims management companies as it is unnecessary.

    Will Barclays pay any legal representation costs?

    The review is not a legalistic process but a customer centric, open and transparent one. The FCA have said that the process is straight forward and as such, customers do not need to obtain legal advice or representation to ensure a fair and reasonable outcome.

    You can of course involve your own advisers and/or seek advice in relation to the process if you think it necessary but, in general, Barclays will not cover the cost of such advice, unless (i) such advice relates to a redress proposal which the Bank has made and (ii) the Bank has agreed in advance with you to bear such costs.
     

  • Who are the Customer Review Team?

    The Customer Review Team has been carefully selected and is made up of experienced professionals, known as Customer Review Directors, all of whom are trained in the IRHP review process.

    The Customer Review Team includes a number of individuals from within Barclays as well as other professionals who have been hired specifically to ensure sufficient numbers of skilled people are available to conclude the review to the highest standards in the shortest possible time.

    What will the Customer Review Directors do?

    Customer Review Directors will review, in detail, all the available and relevant information. Based upon all of this information, the Customer Review Director will reach an initial decision as to whether mis-selling has occurred and whether redress is due or not.

    Each Customer Review Director’s decision will be subject to separate review by the Independent Reviewer.

     

     

  • What happens if the review has concluded that my sale was conducted appropriately and all relevant regulatory standards were upheld?


    If the review has concluded that the sale of your product met the FCA’s regulatory requirements and sales standards, you will receive a letter informing you of this conclusion. This will mark the closure of the review of your case.

    You will of course, if you choose to, be able to complain via Barclays’ normal complaints procedure, to use the Financial Ombudsman Service if you are eligible to do so, or to consult with your legal advisers.

    What happens if the review has concluded that my sale did not meet the standards set by the review?
    If the review concludes that your sale did not meet the FCA’s regulatory requirements and sales standards, the Customer Review Team will consider whether redress is due in your case or not.

    a) If it is decided that redress is not due, you will be informed of this decision and this will mark the end of your review. You will of course, if you choose to, be able to complain via Barclays’ normal complaints procedure, to use the Financial Ombudsman Service if you are eligible to do so, or to consult with your legal advisers.

    b) If, however, it is determined that you are due redress, you will receive a letter that will outline for you the next steps that must be taken in order for us to make you our final offer of redress.

    Do I have to accept an offer of redress?

    Your participation in the review does not bind you to accept any offer of redress. If you are made an offer of redress, it is up to you whether you wish to reject or accept.

    If you accept the offer, Barclays will work with you to implement the redress as quickly as possible although the time this will take will vary from customer to customer and depend on the complexity of your case. Whether you accept or reject the offer, the review for your case will then be complete.

    You can also see the FCA’s answers to some of the most commonly asked questions on their website (new window).

     

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