Alert for Gwent farmers in loans mix-up
7:20pm Thursday 14th February 2013 in News
GWENT farmers are urged to check if they have been missold a fixed-rate loan account between 2006 and 2011.
Emyr Jones, business development director for the Farmers’ Union of Wales, said there are farmers who are discovering that loans taken out during this period are not what they were meant to be.
He said: “A fixed interestrate loan is a straightforward retail product whereby a rate of interest for your borrowing is agreed for a fixed period of time.
“A 5 per cent rate for ten years means exactly that, a rate of 5 per cent fixed for the whole term.
“Problems arose when the clearing banks introduced investment bank products to the retail sector. In July 2012 the financial regulator branded the conduct of banks in the period running up to the crash as ‘unethical’, saying that in many cases staff at major lenders did not understand the products they were selling.”
The Financial Services Authority (FSA) believes banks suspended normal ethical standards and were selling products that were profitable for the investment banks, not well understood by the banking staff who were introducing them and not at all understood by the customers who were buying them.
Anyone who thinks they have been sold a product described as an interest rate swap, interest rate cap or interest rate collar which was assumed to be a straightforward fixed interest-rate loan, should seek an explanation from their bank and professional advice.