OFT launches investigation into law firm bankers

Two of the UK's leading law firm lenders are under investigation after the Office of Fair Trading confirmed that both Barclays and Royal Bank of Scotland (RBS) are the subjects of a price fixing investigation looking at professional services loans.

The OFT has already raided the offices of the two banks, which between them are the two largest lenders to legal and accounting firms.

The investigation was sparked by Barclays, which initially approached the watchdog to notify it of the irregularities.

In a statement the OFT said: "The OFT can confirm that it has launched a Competition Act investigation into alleged anti-competitive conduct in the financial sector. The investigation has a narrow focus, relating to the provision of loan products to professional services firms, and is limited to two parties."

Barclays confirmed the action saying: "Barclays recently became aware that certain members of its professional services team in Barclays Commercial Bank had been approached from outside Barclays in a manner which we regarded as inappropriate. Barclays notified the OFT of this voluntarily on 17 March."

The bank also said as it is contacted the OFT first it could claim 100% immunity if the investigation does reach the stage of fines.

RBS said it is "co-operating fully" with the investigation but declined to comment further.