Claims Management Companies

Russell Brown Excerpts

Thursday 8th November 2012 Westminster Hall

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I congratulate the hon. Member for Thurrock (Jackie Doyle-Price) on bringing this matter to the attention of the House. Yes, she saw me with my BlackBerry. Like most hon. Members here, I receive three or four text messages a month stating that I can claim PPI back. My good lady keeps me in check, so I know fine well that I am entitled to nothing and I have never had any claim for PPI.

I want to draw attention to a different element of claim management companies. I will not beat about the bush: I want to expose a company that is, thankfully, now defunct. It was licensed through the Ministry of Justice and used that licensing as a selling point to commit fraud and rip people off. The company Kerobo Claims, was initially based in Sale, Cheshire, and rented office space through Ravenstone UK. It advertised in local newspapers and on radio programmes and, unfortunately, one morning a constituent of mine heard an advertisement on local radio asking people if they had a loan of any description, and were they sure it would be enforceable in a magistrates court, because if not, Kerobo Claims were the people to deal with it—they could cancel that loan.

That is how my constituent was hooked. He approached the company, and said that he had a loan from Barclays. However, because it was not taken out prior to April 2007, the company could not handle it. He engaged in discussion with it and revealed that he had another loan, which was taken out prior to April 2007, and the company said that it thought it could help. Unfortunately for my constituent and his brother-in-law, as I will divulge, he did not have a credit card that predated April 2007 either, so his brother-in-law offered to help. He did that because the company said that when it had sorted the matter out, instead of sending out a cheque and asking my constituent for reimbursement, that would deal with it more quickly. Alarm bells should have rung, but they did not.

My constituent engaged his brother-in-law, who granted permission for my constituent to use his credit card. Kerobo then contacted the owner of the credit card, and said, “By the way, we think we could help you with any balance on your credit card.” He said that he had a balance of only £20, and asked what help the company could offer. Within 72 hours of the contact and the credit card details being given, Kerobo put a charge of £2,200 against the credit card for my constituent who had originally contacted it. Then, because the balance on the credit card had crept up to over £2,200, it put a charge against the credit card owner. All in all, within 72 or 96 hours, it had a charge of some £3,000. Hon. Members will understand that such a situation is embarrassing for people, so I will not divulge my constituent’s name, but I wonder how many people out there have suffered the same problem, accepted it as a bad experience, and said nothing.

I tried to contact the company by phone and e-mail, but nothing came back. I then saw a copy of the credit card statement and, surprisingly, the amount that had been taken out had gone to an account in the name of Ravenstone UK, the company renting the office accommodation to Kerobo Claims. That was somewhat strange. Some months later, I discovered that the money was being transacted through that account. The credit card company, MBNA, wanted nothing to do with it. I became suspicious, because soon afterwards the company moved to another address—Atlantic street, Altrincham. I was incensed by that and when I happened to be in the area three or four months after I had first been contacted, I went to the company’s so-called premises, which were nothing more than a mailing address. The lady there was helpful to the extent that she was apologetic, but I was only one of probably several hundred people who had called. I explained who I was and what was happening but although she was apologetic, she could do nothing.

I made further inquiries at other locations, and it became more and more obvious that the chances of getting the money back for my constituent and his brother-in-law were extremely limited. I had the names of a number of people, but they had not responded to my telephone calls and e-mails. I also had the name of Kevin Rogers-Davison, and his address and telephone number. I telephoned him and, strangely, during the whole conversation lasting seven or eight minutes he never once asked who I was. I merely said that I was phoning on behalf of the owner of the credit card. He said that he no longer had anything to do with the company and that it no longer existed. I had taken the opportunity to check his address on Google Earth, which showed a splendid, brand new, three-storey townhouse with a superb blue, two-seater Porsche outside the door. I congratulated Mr Rogers-Davison on his house and his car, and he immediately asked me whether I was threatening him. I told him that if he could see who was on the other end of the phone, he would realise that I am of no size to threaten anyone.

People like that should not get away with such activities, but I know that Kevin Rogers-Davison has gone on to other things. The hon. Lady has given clear indication of some of those who have been caught up—all sorts of people—and the tragedy is that those who ripped people off have gone on to PPI claims, and will move from that to something else. All I want to do today is draw attention to the sort of activity that has been going on.

I do not blame the Minister or the Ministry of Justice, but it needs to be recognised that all this has gone on in the name of the Ministry. The wider public out there see that as some kind of guarantee and think, “If this goes badly wrong, there is a Government Department there to back me up,” but that is not the case. When I first became involved in the case, the company had already been suspended and it had been given a period of time to put its house in order. It did not do so, and eventually it lost its licence. I will say to the Minister that the Ministry was as helpful as it possibly could be. I was in touch with the monitoring and compliance unit in Burton upon Trent. People there tried to help, but they were as frustrated as I was, and probably not half as frustrated as my constituents.

[Jackie Doyle-Price]

The hon. Gentleman is giving a powerful example of how some of these companies are deliberately set up to get rich quick and move in and out of the industry swiftly. We have a regulatory regime that allows them to set up something that is nothing more than profiteering. Would he, as I would, like to see more powers for the Ministry to suspend and de-authorise firms more quickly, because the difference is blatant when somebody is legitimate and when someone is preying on consumers?

[Mr Brown]

Absolutely, and I thank the hon. Lady for that intervention. If it were at all possible, when such companies need a licence, I would give them one for a short time in order to test the water and see how good they are. I would ask them to supply details to the Ministry of Justice of some of their customers and whether those people have been satisfied with the contact they have had. It is, however, undoubtedly a get-rich-quick system and unfortunately it has left distraught families in its wake.

On this occasion, the two brothers-in-law involved had to go to another member of the family and borrow the money to pay off the credit card balance. It is a salutary tale of sheer exploitation and people who have no conscience, no mercy and who are not interested in what they do to others. I suspect that people out there will have got into such a state that they have done something untoward—perhaps a crime to get the situation dealt with and get the money back. I even suspect that, in some cases, a person may have taken their own life. I have heard of examples of that without being able to verify whether it was true. It is a sad situation, and one that I hope the Government can do something about.