RBS sold complex swap to 19 year old 1st time landlord

Amateur property investors are caught up in the growing controversy over the sale of complex interest rate swaps to small firms, it has emerged. One budding investor – Jessica Naraghi, 23, from Bolton – ended up with an amortising base rate collar swap even though she did not take out the loan it was meant to protect. Her decision, aged 19, to say ‘yes’ to Royal Bank of Scotland’s Global Banking and Markets salesman over the telephone has cost Ms Naraghi £73,000 and left her £36,000 in the red. Loan documents show that NatWest, owned by RBS, required Miss Naraghi to purchase the capital markets product as a condition of securing her £472,000 loan in June 2008. It said a precondition of any agreement was that the bank was “satisfied with the customer’s interest rate hedging arrangements”. “I wanted to purchase a commercial property,” said Ms Naraghi, who was advised by her property owning father about the merits of buying commercial real estate to generate a profitable return. “They agreed to give me a large loan but it did not go through. But they activated the swap two days before.”