View the article online at http://citywire.co.uk/money/article/a882936
Claims firm collapse hits customers and investors
Investors and customers of collapsed claims management firm Rebus stand to lose millions of pounds.
Investors and customers of a collapsed claims management company stand to lose millions of pounds after the business went into administration.
Claims management firm Rebus appointed administrators earlier this month. The firm was handling claims worth around £930 million from 1,700 clients at the time it appointed administrators.
Law firm Moore Blatch has set up a triage service for former clients of Rebus whose claims risk missing the six-year limitation period on claims against financial firms.
Consumers must make a complaint to the Financial Ombudsman Service (FOS) within six years of the event complained about, or if later, three years after discovering grounds for complaint. Customers must complain to the FOS within six months of a firm sending them a final response.
Other clients paid Rebus up-front to settle financial mis-selling claims and may lose that money.
Rebus also raised £817,000 through crowdfunding website Crowdcube to expand the business last year. A hundred investors put up between £5,000 and £135,000 each, having been told returns could reach up to 10 times their original investment within three years.
Rebus employed a banned adviser, Richard Rhys, as a business development consultant.
Mark Osgood, a partner at Moore Blatch, said that more due diligence needed to be done on crowdfunding investments.
‘Crowdfunding is a great way for companies to raise money and for investors to reap the rewards of being in at the beginning,’ he said.
‘However, crowdfunding can also carry greater risk, and often that risk is not just borne by the investors. When Rebus entered administration the implications could be just as grave for its clients as typically they stand to lose, on average, £100,000 if their cases miss the six-year limitation cut off.
‘Our advice, whether you are an investor, supplier or using the services of a crowd funding backed company, is to do your due diligence and properly assess the risks of failure,’ said Osgood.
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