Citywire for Financial Professionals
Stay connected:

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.

 
Claims firm collapse hits customers and investors

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.

3 comments so far. Why not have your say?

Anthony Tinslay

Feb 17, 2016 at 17:34

They were certaibly not "investors" who put up between £5,000 - 135,000. They were anthing from totally naive to extremely greedy and foolhardy They would have had a bette chance of making a return by placing the whole lot on any hose with odds of at least 10 - 1.

report this

John D

Feb 17, 2016 at 20:24

So can investors make a claim against the claims company? The world's gone mad.

I think Rebus should be investigated.

report this

Micawber

Feb 18, 2016 at 07:20

Justin Cash is surely a nom-de-plume for a financial journalist!

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

New Economies - Frontiers and Latam Exciting markets, unrealised investment opportunities


From Brazil and Mexico, to Vietnam and Nigeria, the rapidly developing economies of Latin American and frontier markets, which are some of the smaller, less developed economies in the world, provides investors with a wealth of potential opportunities. Discover why BlackRock's investment trust range is well placed to help you make more of these exciting regions.

Watch Now

The Citywire Guide to Investment Trusts


In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

Emerging markets recover, but now for the hard part

by Michelle McGagh on Sep 27, 2016 at 12:00

Sorry, this link is not
quite ready yet