* Conservative Garnier calls for independent review
* Labour's Jamieson says firms should have right of appeal
* Thousands of customers were kicked out of scheme (Adds comments from lawmakers)
By Matt Scuffham
LONDON, Dec 4 (Reuters) - A scheme set up by Britain'sfinancial regulator for banks to compensate small firms mis-soldcomplex interest rate hedging products lacks transparency, isinconsistent and does not give victims a proper right of appeal,lawmakers said on Thursday.
British lawmakers were debating why thousands of customershad their claims for compensation rejected or were offeredalternative products in the scheme, which was set up by theFinancial Conduct Authority last year.
The FCA ordered banks to review nearly 30,000 cases forpossible mis-selling after finding serious failings in the waythe products were sold. But the scheme has drawn sharp criticismfrom firms that believe it is loaded in favour of the banks.
"There is no confidence in this process. The whole point ofthe FCA is to protect unsophisticated consumers. They'vemanifestly let these consumers down," Conservative Mark Garniertold a parliamentary debate on Thursday.
Garnier, a member of parliament's Treasury Select Committee,called on Britain's finance ministry to set up an independentreview of the scheme.
Labour's finance spokesman Cathy Jamieson questioned whymore than a third of the cases were kicked out before the schemeeven began on the grounds that those clients were financially"sophisticated" enough to understand the agreements.
Jamieson said she agreed that there should be a cut offpoint where firms are deemed big enough to take responsibilityfor buying the products but said "how the distinction is arrivedat is a different question entirely".
Guto Bebb, chairman of the All Party Parliamentary Group onInterest Rate Swap Mis-selling, said there was a lack ofconsistency in the way claims were treated by different banksand called on the FCA to implement a proper appeals proces.
He also questioned whether the role of the scheme'sindependent assessors - usually big accountancy firms - had beenproperly examined. Those assessors are supposed to ensure allcustomers are treated fairly.
The hedging products, known as swaps, were meant to protectsmaller companies against rising interest rates, but, when ratesfell, the companies had to pay extra charges, typically runningto tens of thousands of pounds. Companies also faced penaltiesto extricate themselves from the deals, which most claimed theyhad not been made aware of.
The FCA has said the scheme is fair. (Reporting by Matt Scuffham; Editing by Elaine Hardcastle)