People who lent a motorhome rental business money are facing big losses after it collapsed owing more than £7m.
UnbeatableHire Limited used the loans to buy more motorhomes, promising to give lenders all of their money back and returns of up to 10% a year.
But many lenders are out of pocket after the company went into administration and numerous motorhomes were said to be missing.
Its boss has denied doing anything deliberately wrong.
UnbeatableHire Limited made its money by renting motorhomes to holidaymakers.
It traded under various names, including Motorholme, with depots across England and Scotland.
People were invited to lend the company up to £36,000 a time, with each loan secured against an individual motorhome that would be bought with their money.
The lenders were told if anything went wrong, they could always claim the motorhome, with their right to it listed in a legal document called a chattel mortgage, which was filed at Companies House.
The investment scheme ran for almost a decade, with hundreds of lenders receiving monthly interest payments which were far higher than they would have got from a bank.
Those who chose to take their cash out when their loan term ended before the company’s collapse got all their money back in addition to their interest payments.
So it was only when administrators were called in to deal with the company’s affairs, following its collapse in December 2019, that problems were uncovered.
UnbeatableHire still had about 350 motorhomes, but the administrators – Antony Batty & Company – said that another 123 vehicles were “missing”.
Some were shown as “stolen” in company records, but the administrators said they had never been reported stolen to the police. Others had been written off or destroyed in separate fires at two of the company’s depots.
Some motorhomes were found to have more than one chattel mortgage listed against them. One of the lenders affected, Alistair from Glasgow, told Radio 4’s You & Yours he believes that means that they were not provided with the type of security they were promised.
“The administrator sent me a letter saying that my chattel mortgage was in fact a second mortgage on the same vehicle and the first chattel mortgage takes precedence,” he said.
‘This could be either maladministration or deliberate malpractice, but the end result is the same. Basically, I get nothing.”
Other lenders have been shocked to discover that their loans had been used to buy second-hand vehicles when they had been told their money would go towards brand-new ones, which would be worth considerably more.
Kevin from Hampshire has discovered that both of the motorhomes against which his loans were secured had been sold without his knowledge.
“Despite the agreement saying they could not sell the vehicles without giving us our money back or transferring the security, it would appear that the company has done exactly that,” he said.
About 80 of the motorhomes classed as missing by the administrators had been sold, they say, prior to their appointment and with chattel mortgages still attached.
People across the country have innocently bought them, unaware that someone else might have a claim on their ownership.
Bob from Croydon spent just over £25,000 on a second-hand motorhome from UnbeatableHire Limited. It allowed him to take his disabled stepson abroad on holiday for the first time, as the family struggle with public transport.
Now he is facing legal demands to hand over the vehicle.
He received a letter from solicitors, acting on behalf of an UnbeatableHire lender whose loan was secured with a chattel mortgage on the motorhome which Bob had bought, telling him that the motorhome does not belong to him.
“If there’s somebody who’s got a claim against this van, they should be claiming it against the guy who sold it to me, not me,” said Bob.
Other innocent purchasers have found themselves in a similar position and are worried that they may be forced to give up the motorhomes which they bought in good faith.
Buyers not told
UnbeatableHire’s managing director, Andrew Hughes, told the BBC the vehicles were sold on the understanding they were being passed on free of the chattel mortgages, which he says was permitted under the agreements with lenders, so he saw no need to mention it to buyers.
He accepted that the chattel mortgages filed at Companies House had not been updated to reflect the changes.
But he said that whenever a motorhome was sold, a replacement vehicle was allocated to lenders as security for their loan in the company’s own “internal register” or spreadsheet instead, and that was the way the company had interpreted the loan agreement with lenders to work.
“The loan agreement allowed us to categorically sell any vehicle we deemed necessary,” he said, adding that the scheme ran for eight years and everybody concerned was “very happy”.
“Unfortunately when it went into administration, it was a different story and it was a number of unexpected and external circumstances that basically destroyed it and when that happens, there is fallout in any business,” said Mr Hughes.
He could not explain why some lenders had been allocated second-hand motorhomes instead of new ones as security for their loans, saying: “That’s not how the scheme was set up” and the company “didn’t deliberately do that”.
Any stolen vehicles, he said, would have been reported to the police and if any motorhome had more than one chattel mortgage on it, then that mistake was “exceptional” and “not intentional”.
Mr Hughes said replacement motorhomes had been ordered, but had not arrived when the company went into administration and he was “very sorry” for all the inconvenience caused by Unbeatablehire’s collapse.
He denies breaching the agreement with lenders, but the administrators believe the agreement may have been breached so have reported their concerns to the Insolvency Service.
The 350 motorhomes which the company still had when it entered administration have been sold to another firm or handed over to lenders, meaning they have either got a motorhome or some or all of their money back.
But for those whose motorhomes have been lost or sold, it is not so straightforward.
The stand-off between some lenders and motorhome purchasers looks likely to head to court, with both sides claiming ownership of the vehicles.
Meanwhile, Kevin from Hampshire does not know where the two motorhomes listed on his chattel mortgages now are, after they were sold without his knowledge.
The interest payments he received do not come close to covering the £70,000 which he lent the business at the start.
He says that money would now have been useful to fund adaptations to his home, since his health has deteriorated and he can no longer climb the stairs.
“We’re probably going to have to sell our house to cover the losses and move to somewhere that’s more appropriate for someone with a crippling spinal disease,” he said.