RSM launches bank mis-selling probe over collapsed Dundee firm

Paul Dounis and William Duncan of RSM Restructuring, and administrators of Jaydee Heating, said there was a potential claim for compensation for the mis-selling.

The products, which were intended to be a protection against interest rate rises, were financially speculative and complex, and were often a condition for a bank agreeing to provide a loan facility.

Banks incentivised the sale of the products and exit fees were often not fully disclosed.

Settlement was recently reached between City watchdog the Financial Conduct Authority and certain major banks, including 73 per cent state-owned, bailed-out RBS, in relation to the sale of the products.

Jaydee Heating collapsed in November last year with debts of almost £400,000 after profit margins were increasingly squeezed as competition for business intensified leading to prolonged trading difficulties.

About 20 employees were put out of work when Jaydee closed its doors, with RBS as the firm’s secured creditor.

The administrators added: “We are currently investigating whether or not the company was sold a relevant interest rate hedging product, and whether there is an entitlement to redress whether inside the framework of the FCA settlement or otherwise.”