The Lost Commission
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The Mortgage Times saga seems to contain more twists than a Dan Brown novel, with every chapter leaving appointed representatives with even more questions.
The story began in 2009, with ARs complaining to Mortgage Strategy that they had stopped receiving their commissions, which left ARs asking: what had happened to their commission and would Mortgage Times even pay up in the end?
There were clues along the way. The company’s results showed auditors had raised concerns about its future in 2008 and said there was a “material uncertainty which may cast significant doubt about the group’s ability to continue as a going concern.”
If that didn’t spook people then the news that as of December 31 2008 Mortgage Times owed its creditors a total of £4,734,779 certainly did.
But before the collapse of the firm, directors continued to reassure ARs that their commission would ultimately be paid and the debacle would have a happy ending.
But when it comes to money, honesty is always the best policy, which is what has angered ARs the most.
The directors have offered an apology to ARs saying they had left no stone unturned in an attempt to find a solution to its difficulties. But for those struggling to get by as a result of Mortgage Times’ continued prevarication over the payment of fees, understandably this doesn’t quite cut the mustard.
A further twist came with the news that Chris May and Paul Carmody have launched Carmody & May and registered the firm’s website in November, which has rubbed salt into the already open wounds of many ARs.
And although Carmody and May need to move on and look at new business ventures, it is the speed with which they have done so that will leave a sour taste in the mouths of many ARs.
Add to this the wording on the website, which states the directors are able to “identify short and long term risks which are not necessarily obvious to businesses and help to manage or mitigate them,” and it cannot have been easy for many ARs to swallow.
Those same ARs now have a long to find out whether they will ever see any of the thousands of pounds in unpaid commission that’s owed to them. But with no further information available about the firm’s administration, they could have a long wait. It’s close to a year since Network Data went under but incredibly the administrators revealed before Christmas that the amount owed to unsecured creditors - the ARs - was still unquantified. And again, Network Data came out with the same excuses to its ARs about the non-payment of fees prior to its collapse.
Just like a Dan Brown novel network collapses are long and drawn out, come with repetitive dialogue and the outcome is always the same.
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Readers' comments (4)
Anonymous | 18 Jan 2010 4:02 pm
It is my understanding that if a company continues to trade whilst insolvent, the directors become personally responsible for any debts incurred during that period.
It is clear that Carmody and May knew the firm was going down the pan which is surely sufficient evidence that they knew MT was not a going concern and had long been planning to set up an alternative.
Perhaps a 'class action' could and should be pursued here by the ARs against the directors of Mortgage Times.
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Frank Jurga | 18 Jan 2010 11:20 pm
This is a great piece of journalism - it's one of the best articles I have read for a long time. Well done. Just a quick point, as I said in this week's very long letter, the ARs must move on - they must understand and accept that they won't see a penny in commissions - it's all gone. That's why we had all the dishonestly over such a long period - to buy time to get as much money out as possible. If there is any money left after secured creditors and HMRC have been settled, the Administrators (which eventually will rename themselves as liquidators) are going to cost at least £200,000 to sort this lot out. There won't be any for distribution to ARs as they are unsecured (can you believe that) creditors. There has been so much that the FSA cannot do anything about because the issues have been commercial and not regulatory but I think the dishonestly of the Directors should be investigated by them because the FSA have rules about people being fit to work in Financial services
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Mike Hughes | 19 Jan 2010 11:34 am
I am an ex NDL AR and have been thro' the situation now afflicting MT ARs. They like us will receive absolutely nothing via the Administrators, even though it was us who actually produced the income for those shabby characters to collect and spent it.
The FSA has not acted because there is nothing in it for them, likewise the Insolvency Service is unwilling to act for fear of throwing the FSA into bad light. HMRC was viewed as the best way of retrieving the largest amount of cash from the debacles infront of the poor old unsecured ARs - surprise surprise !!!
As for the Directors of the now defunct Networks, well they can plough on safe in the knowledge that their personal assets are safely tucked away and can Phoenix away with indecent haste.
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Anonymous | 29 Jan 2010 4:39 pm
Having worked at MT i do have to laugh at some of the brokers commenting,in particular 1 broker who was struck off from MT and owed MT money,yet here he is acting as the voice of the people about being Fit and proper.I have it on good authority that MT was owed over half a million pounds in clawed back Indemnity commision and that the Directors put in almost 1 million of there own money to try and save the company evan signing PG,s which they are liable for all withing the last 4 months,hardly the act of someone trying to act dishonourably.Its a shame all of this goes un noticed ,maybe the Directors should make a statement but no doubt all of this will come out in the wash eventually.
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