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LONDON, Sept 4 (Reuters) - Britain's markets watchdog saidbanks have started paying compensation for mis-selling ofinterest rate swaps and the bill is expected to increase rapidlyover coming months.
The products were designed to protect smaller companiesagainst rising interest rates but when rates fell, they had topay large bills, typically running to tens of thousands ofpounds. Companies also faced penalities to get out of the deals,which many said they had not been told about.
The Financial Conduct Authority said in a statement onWednesday that by the end of August 10 offers of redress hadbeen accepted by businesses totalling 500,000 pounds.
This figure is expected to increase rapidly over the comingmonths with 2010 offers already sent out to customers with afurther 1,700 offers due to be sent shortly, the FCA said.
"Due to their complicated nature, redress offers tocustomers making a claim for certain consequential losses, maytake longer," the FCA added.
