The selling of hedging products to small and medium-sized enterprises - a financial practice that has been compared to the payment protection insurance (PPI) scandal - ought to have involved a very careful explanation to consumers.This is according to vedentaheding.com senior consultant Martin Berkeley, who explained during a BBC Moneybox podcast that hedging is "not necessarily a bad thing" if lenders are curtailing the risks a company would face if interest rates rose.However, he argued the problem occurs when these rates fall or if the products incur bank charges upon exiting that the client is unaware of.Some companies could have given commission to sales staff who missold these products, the consultant noted, pointing out this would vary between banks.Managers who introduce new clients to professionals in risk management could be given "targeted bonuses", Mr Berkeley declared.Recently, the Financial Services Authority came to an agreement with Lloyds, Barclays Bank, HSBC and RBS regarding redress when misselling of interest rate hedging products had occurred.Amir Hussain Amir specialises in personal loans, consumer debt and debt management
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