Claims firm collapse leaves owner 'financially wiped out' 

- Michael Fahy - Crains Manchester - 29th March 2010

Altrincham-based financial claims firm Ratio Money has gone into administration.

The business, owned by founder Matthew Porteus, has appointed Bury-based insolvency firm Leonard Curtis. Administrators have also been appointed to Porteus's other businesses, recruitment firm Ratio Search.

Porteus said he was forced to call a halt because the business ran out of money. He said he had been expecting a payment of around £200,000 from a funder in March, which still hadn't materialised.

“I'm definitely not riding out of here with a load of money,” he said. “My reputation is going to be crap and I could be made personally bankrupt. I'm a 35 year-old guy who has gone from looking at having a business that was going to provide financial security for my son to being financially wiped out.”

Ratio Money was set up in February 2007 initially to handle cases for people who wanted to reclaim bank charges. It then moved into the market for unenforceable credit agreements and took on thousands of cases on which it charged an upfront fee of £295.

Porteus, 35, also brought in Coronation Street actor Michael Le Vell, who plays mechanic Kevin Webster, as a director. Le Vell fronted publicity campaigns for the business and is believed to have invested around £250,000 to become a shareholder. Companies House records show that he held a 25 per cent stake.

Porteus said Ratio Money was generating turnover of around £4m a year ago, when he announced plans to create 125 new jobs. Since then, it has been beset with a series of problems that all contributed to its downfall, including a dispute with a solicitor whom he alleges took on thousands of cases from the firm but refused to pay for them.

He held talks with people who were supposedly interested in investing in the business, but they ended when the would-be investors attempted to poach staff and/or introducers away from the firm.

“This industry is full of sharks,” Porteous told Crain's. “Almost everyone who has walked through the door of Ratio Money in the past few months has tried to screw us.”

He insists that the 4,500 or so cases still on Ratio's books are being pursued by its panel of lawyers and that those which are successful will still receive the refunds to which they are entitled. The lawyers will also receive their success fees.

“A lot of people will make money out of our endeavours,” he said. “It's just a shame that we won't. But I believed in this until the end, which is why we sold 60 per cent of our back book in Solace Debt Management to fund Ratio Money. In the early days we had funded the business through Ratio Search, which means I've lost that business as well.”

“Mike (Le Vell) is also distraught. He really believed in this. He sat through seminars with solicitors where we were given legal opinions by counsel and he even turned up to court cases where we had claims overturned,” said Porteus. Companies House records show that Le Vell resigned as a director on March 17, prior to the appointment of administrators last week.

“I've got no idea what I'm going to do now,” said Porteus. “It's a terrible mess, and pressing the button on administration is not a nice thing to do.”

Pete Petrondas, the founder of recycling firm Eazyfone, who recently set up financial claims firm Hamilton Brady, said that the reputation of the sector had been tarnished following the negative publicity surrounding Manchester-based Cartel Client Review, which has been suspended by the Claims Management Regulator, part of the Ministry of Justice.

Petrondas added: “This is unfortunate as although proving a credit agreement is unenforceable is a complex legal process, there remains a genuine opportunity for consumers who have been the victim of a mis-sold credit agreement to question whether these agreements are in fact enforceable at all.”

He said that where many firms in the sector had gone wrong was to claim that most credit agreements were capable of being written off, which was untrue. As they were charging upfront fees, they had less reason to be as concerned as they should have been about the viability of such cases.