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Customers launch campaign over loan products

Scottish businesses pushed to the brink by what they claim were mis-sold loan hedging products kicked off a nationwide campaign for redress yesterday.

The NAB Customer Support Group handed cards to bank employees outside the headquarters of Clydesdale Bank in Glasgow and are to target branches in Edinburgh, Dundee and London.

The small business owners say they are at breaking point after being advised by banks, principally the Clydesdale, to enter into long-term fixed-rate loans containing embedded interest rate swaps with huge hidden breakage fees.

The Clydesdale has insisted its fixed-rate loans are not derivatives and will not be reviewed, though it has agreed to review sales of some other swap-related loans.

The Financial Services Authority has no power to regulate loans. Derivatives experts, however, have identified the Clydesdale fixed-rate loans as containing swaps.

Now Jim McGrory, a St Andrews hotelier and member of the support group, has been told by the Financial Ombudsman Service that his Clydesdale fixed-rate loan "appears to have some similar features to a hedging product".

The bank however has told the hotelier's MSP, Roderick Campbell, that Mr McGrory's product was "a simple fixed-rate loan that does not contain a derivative".

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