Financial Watchdog Faces Legal Challenge Over Exclusion from Compensation Scheme

Britain's Financial Conduct Authority is under legal scrutiny in London's High Court for allegedly failing to include thousands in a £2.2 billion compensation scheme. The case, backed by the All-Party Parliamentary Group on Fair Business Banking, claims many businesses were unjustly excluded, leading to significant financial harm.

The Financial Conduct Authority (FCA) in Britain is facing legal action in London's High Court, accused of unlawfully excluding thousands from a £2.2 billion bank redress scheme linked to interest rate hedging products. These allegations stem from an independent review that criticized the FCA's handling of compensation claims.

The FCA had facilitated an agreement in 2013 with major banks like Barclays, HSBC, and Lloyds to compensate customers mis-sold these products between 2001 and 2011. However, a controversial 'sophistication test' excluded some from compensation, allegedly depriving many businesses of much-needed redress.

The FCA maintains its stance, arguing it was under no obligation to pursue further compensation, despite findings suggesting unjust exclusions. The ongoing legal hearing seeks to address these grievances, with a judgment anticipated soon.

(With inputs from agencies.)