Firm's administrators make claim over mis-sold product ADMINISTRATORS FOR a
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Norfolk-based haulier that closed in February said it could have been mis-sold a financial product and be owed compensation.
Former Pall-Ex member The Delivery Specialists, which traded as Clarks Direct from a base outside Norwich, was placed into administration after building up significant post-arrangement liabilities with HMRC, while operating through a company voluntary arrangement.
In 2009, the firm bought an interest rate hedging product (IRHP) from The Royal Bank of Scotland (RBS) that was supposed to have protected it from interest rate rises, but a claim for redress has been made because administrators believe it should not have been sold it.
CM understands that Wiltshire haulier D Mortimer & Sons and Norfolk builders merchants Halls Group have made similar claims.
D Mortimer & Sons said its solicitor was still liaising with Lloyds Banking Group over its claim. Director Jonathan Ovens said he hoped the matter would be settled by September.
Clarks Direct has now gone into liquidation and is estimated to owe almost £600,000 to unsecured creditors. Administrators at PKF (UK) LLP said it could only pay creditors a dividend if it received "a sizable redress payment in respect of the IRHP mis-selling claim".
A report from PKF (UK) added: "The administrators have had sight of a letter confirming that the company, subject to meeting the FSA definition of a 'non-sophisticated customer', will be entered into the review process for possible redress if it is determined it was mis-sold the IRHP."
A spokesman for the Financial Conduct Authority said approximately 40,000 firms are affected by IRHP mis-selling. "A number of customers have been told they are due redress; there are now discussions about what that redress will be," he said.
An RBS statement said: "We have agreed with the Financial Conduct Authority that we will carry out a review of the sale of interest rate hedging products to applicable customers.
"The review will be carried out following guidelines approved by the regulator and will be supervised by an independent reviewer.
"The review process is designed to be robust and will deliver a fair and reasonable outcome for customers.
"It would not be appropriate for us to comment on individual cases such as this while the review is continuing."
Paul Clark, MD of The Delivery Specialists, could not be reached for comment.