Hundreds of struggling Scottish businesses have been caught up in the latest multi-billion-pound mis-selling scandal to rock the banks.

Taxpayer-owned RBS's part in the controversy may alone have cost thousands of struggling UK companies a massive £3bn in extra bank payments.

At issue are interest-rate swap agreements (IRSAs) attached to business loans that are currently under investigation by the financial regulator.

It is claimed the scandal could become the business version of payment protection insurance (PPI), in which banks have set aside £9bn to compensate individuals.

An investigation by The Herald shows that UK small businesses, touted as vital to economic recovery, may have paid at least £10bn in extra interest costs to banks for IRSAs, and face extra liabilities of over £20bn, potentially impacting on 80,000 jobs.

Crucially, typical sales appear to have breached the Financial Services Authority's rules of conduct.

IRSAs look like fixed-rate loans, offering businesses protection if interest rates rise, and were sold heavily by banks in 2005 to 2008. They were often made a condition of borrowings. But they were complex financial instruments, with exit penalties added to the company's banking liabilities. Plummeting bank rates left companies marooned on the high fixed rates, and they also massively inflated the liabilities.

A campaign group has surveyed 44 businesses and found they have paid out £28.6 million in extra interest charges for fixing with IRSAs – an average of £636,000. They also face "break fees", for exiting what can be 15-year agreements, which average almost £1m for each business.

The figures suggest that the 5000 or so RBS business customers with an IRSA have paid an additional £3bn for potentially mis-sold agreements, and are weighed down by £5bn of extra liabilities.

RBS chairman Sir Philip Hampton told the bank's annual meeting last month that the IRSA issue was "not remotely comparable with PPI".

But scaling the RBS figures up conservatively to reflect the sales of other banks, none of which have quantified their sales, suggests there could be over £10bn of disputed sales and a £20bn liability burden weighing on 20,000 small businesses.

The Bully Banks survey found each business had lost an average four jobs as a direct result of its extra burdens. That implies a potential impact on 80,000 jobs UK-wide. Campaigner Paul Adcock said: "The mis-selling of IRSAs is a hidden brake on economic recovery."

The FSA is due to report later this month on its investigation of IRSA sales. Kay Blair, vice-chairman of the Financial Services Consumer Panel, set up to monitor the FSA, told The Herald: "I am convinced the FSA is on the case. I think there is the potential for intervention."

The FSA has already signalled its disapproval of swap agreements which last longer than the loans they cover, locking in a business with large costs long after its bank loan has been paid off.

Cat McLean, head of dispute resolution at Edinburgh law firm MBM Commercial, said: "A large number of businesses were put in a position where they had no alternative. No consideration was given to the instrument which might be most appropriate to that customer, and no information given on alternative ways financial risk could be reduced. These are obligations imposed on the banks under the FSA's conduct-of-business rules."

A Court of Session judge will rule

within weeks on a case in which small property developer Grant Estates, now in administration, is suing RBS for allegedly mis-selling a swap agreement in 2007.

"The judgment could open the floodgates," said Ms McLean at MBM, which is advising a number of clients on mis-selling claims. At another law firm in the capital, one client alone has a disputed IRSA covering loans of £650m.

RBS argued in court that UK legislation says only individuals, not businesses, may sue banks for mis-selling, and that bank contracts with businesses define the relationship as allowing "no reliance on advice".

The Bully Banks survey however found 41 of 44 businesses had been "approached by their banks" with the IRSA, and for 29 the agreement was a "condition" of their loan.

Mr Adcock said: "These products are so complex that the professional advisers typically available to small business would not have been able to provide proper guidance."

He added the campaign knew of "a significant number of companies securing out of court settlements, with gagging orders imposed by banks" as a condition of the settlement.

Sir Philip Hampton told RBS shareholders that the bank's sales processes were "extremely strong" and he was "satisfied we gave appropriate advice".

A spokesman from the British Bankers Association said hedging helped businesses manage risk. "Interest-rate swaps are regulated, and therefore banks have strict guidelines and rules in place.

"Banks will always advise customers to seek independent advice if they are uncertain about any service."