Banks including Lloyds and RBS have come under fire for their treatment of small businesses . Banks including RBS and Lloyds have again come under fire over their treatment of small businesses . It has emerged many put firms into high-interest fixed-rate loans then charged them huge fees to switch when interest rates plummeted . MPs are stepping up pressure on high street lenders , urging them to review their sales of the loans , which have trapped thousands of businesses in poor deals . Members of the Treasury Committee are said to be 'furious ' the City watchdog failed to protect these small firms . Banks have already paid £1.8billion in compensation for mis-sold 'interest rate swaps ' , meant to protect firms if interest rates rose . When rates fell to record lows many companies were hit with huge 'breakage ' penalties if they wanted to switch deals . More than 14,000 small businesses received compensation . But fixed-rate loans and tailored business loans – the centre of the latest row – are not regulated by the Financial Conduct Authority , meaning customers mis-sold them are not eligible for compensation . The FCA says such loans can also saddle businesses with huge switching fees . Some have an interest rate swap buried in the contract , but even the more basic loans can come with huge unpredictable break penalties . According to the Treasury Committee , fixed-rate loans and tailored business loans can be just as dangerous as interest rate swaps . It has emerged 60,000 firms were sold these loans – about half by Lloyds , around 11,000 from RBS , and 11,272 by Clydesdale Bank . In a damning report earlier this month into the treatment of small firms by banks , the Treasury Committee said it had received evidence Clydesdale Bank mis-sold tailored business loans . It said the lender engineered the products so the interest rate swap was buried in the loan – meaning it fell outside the FCA 's remit . Firms were hit with penalties of up to 40 per cent of the value of the loan if they wanted to terminate their contract . Last night Mark Garnier , a Conservative member of the Treasury Committee , said : 'We are furious with the regulator for not picking this up . The FCA is walking away from its moral responsibility , if not its legal duty , to protect consumers . ' He added : 'Banks need to demonstrate they have changed – and voluntarily resolving this issue would help to resolve that . ' RBS said it is trawling through its sales of fixed-rate loans . Lloyds said its fixed-rate loans were 'fundamentally different ' to the tailored business loans sold by Clydesdale Bank , with lower break costs .
Banks including Lloyds and RBS under fire for treatment of businesses . Many found to be putting small firms into high-interest fixed-rate loans . They charged them huge fees to switch when interest rates plummeted .