France’s consumer watchdog is to investigate an alleged scam in which about 200 people in Ireland claim they were mis-sold holiday properties in the country. The alleged victims say they relied on the promise of guaranteed rental income which hasn’t materialised when they made their investments in France.

The leaseback model, in which the purchaser acquires the freehold rights along with limited use of the property and a rental return for the remainder of the year, gained popularity in Ireland before the financial crash.

Vera Jourova, the European commissioner for consumers, has confirmed that the French watchdog was preparing to launch a nationwide investigation as a “large number” of French people are also affected.

“The DGCCRF is currently performing checks in order to identify the involved traders which are still active on the market, as many asset management companies have gone into liquidation, before it can subsequently initiate the necessary enforcement actions which will follow against the concerned traders,” Jourova said.

More than 2,200 customers from across Europe have signed a petition complaining about their French leaseback experiences.