FSA lifts estimate of mis-sold swaps The FSA has been forced to up its estimate of products mis-sold to businesses across the country by about a third, from 28,000, after being supplied with new information by banks. Barclays, HSBC and Royal Bank of Scotland have so far put aside a combined total of about £630m against the cost of compensating customers mis-sold interest rate hedging products by their investment banking arms. Lloyds Banking Group has said it does not expect the compensation costs to be "material." Estimates of the eventual cost of swap mis-selling vary greatly, however some derivatives experts believe the scandal could end up costing the banking industry more than £10bn, potentially making it more costly than payment protection insurance mis-selling. The dramatic upward revision follows more detailed information being handed to the regulator by the banks on how many interest rate swap contracts they sold to their small business customers. There are even suggestions the scandal could get far bigger if the FSA decides to investigate fixed-rate business loans, sold by banks, that contain embedded derivative contracts that have left some customers with large break costs, which they say they were never warned about.