The High Court has forced two claims management companies (CMCs) into liquidation, after their activities were found to be fraudulent. The High Court is entitled to take this action if it believes it is in the public interest to do so.
The two linked companies, based in Warrington, claimed they could recover lost monies on behalf of investors who had suffered losses in alternative investment schemes. However, the Insolvency Service’s investigations found that there was little or no prospect of any funds being returned to the investors.
The companies sourced their business via cold calling and told the victims of the failed alternative investments that they could act on their behalf in return for payment of an upfront fee.
The company’s employees went as far as to claim that they had been appointed by the Insolvency Service to carry out the claims activity. Many of those contacted said the callers were “aggressive and persistent”.
Later, the companies failed to co-operate with the insolvency Service investigation, save for an attempt by the director to claim that his companies had been hijacked by fraudsters, and that he was unaware that the cold calls were even taking place. He denied that upfront fees were taken, and instead suggested that fees were only taken out of monies recovered on behalf of investors.
Insolvency Service chief investigator David Hill said:
“[Name of company] employed aggressive sales tactics to prey on people who had already lost money, seemingly with the aim of scamming them.
“Members of the public, who have lost money in any kind of investment, should be wary of anyone calling them out-of-the-blue, claiming to be able to recoup their investment losses.
“The Insolvency Service will investigate and shut down the activities of such companies.”
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article