Banks who sold interest rate swaps to farmers should be taken to court because justice has not been served, a farm debt negotiator says.
Three of the country's largest banks have reached a $24.7 million settlement with the Commerce Commission over the way swaps were sold between 2005 and 2009, which is soon to be paid out to affected farmers.
The swaps, offered by ANZ, Westpac and ASB, involved farmers hedging against an increase in interest rates - but locked them into the higher rates when interest levels fell.
The Commerce Commission told MPs yesterday that $8 billion worth of swaps were sold to farmers, but only 10 to 15 percent of buyers ended up complaining.
But farm debt negotiator Janette Walker said the settlements being offered - between $15,000 and $100,000 in most cases - did not come close to what people lost.
"I'm disappointed that it never got to court because I felt that it was a very winnable case," she said.
"It was really clear right from the get-go that the banks mis-sold the products, so I'm disappointed that justice hasn't been had, and that the banks haven't been made publicly accountable for the harm that they've caused.
"I thought personally that it should have been somewhere around the $200 million mark because I've be very privy to a lot of farmers disclosing their situation to me and I expected that they would be paid the break fees in full."
Ms Walker said farmers should band together and take legal action for more compensation from banks.
Labour's primary industries spokesperson Damien O'Connor said the settlement reached between the Commerce Commission and the banks was a paltry sum.
"The offers are insulting, almost, when you consider the amount of money that was loaned, mis-sold often, and farmers miscalculated what was going to be the effect of that loan," he said.
"The Commerce Commission, to be fair, did say they would have won this case ... my disappointment is the Commerce Commission doesn't have the guts to take one of these cases through to court and set a precedent, send a message to banks that this kind of behaviour in the future won't be tolerated."
The Commerce Commission has closed its investigation but said farmers can still query their settlements with their banks or with it.
Fight goes on
One of the 250 farmers waiting for a payout from banks over the swaps said she would keep fighting her bank for more compensation.
The Northland woman, who does not want to be named, lost her farm because of the deal.
She said she would take independent legal action after a brush with receivers.
"They all swoop in like vultures, they put security on the gates you know so nothing gets taken off the farm, you have people coming in snooping around, you know it's just horrible."