The Financial Services Authority said Thursday it is reviewing practices of the U.K.'s big retail banks after finding serious problems with the sale of interest rate hedging products to small businesses.
The authority said Thursday the review will include Barclays, HSBC, Lloyds and RBS banks. The authority said in a statement that the banks have agreed to review sales and provide "redress" to customers in a process overseen by independent reviewers.
The FSA had announced in June 2012 that there were significant failings in the sale of IRHPs, which were marketed as a way for businesses to protect themselves from rate increases.
The authority's new statement says that in a review more than 90 percent of the 173 cases it studied turned up at least one regulatory violation.
"Where redress is due, businesses will be put back into the position they should have been without the mis-sale," said Martin Wheatley, CEO-designate of the Financial Conduct Authority.
UK banks have so far set aside 12.3 billion pounds ($19.6 billion) to compensate customers who bought payment protection insurance which they didn't need.
The Financial Services Authority also said that IRHP sales by Allied Irish Bank (UK), Bank of Ireland, Clydesdale and Yorkshire banks, Co-Operative Bank and Santander UK are being scrutinized. It said those banks are likely to launch their own reviews in the next two weeks.