Page last updated at 08:45 GMT, Friday, 11 September 2009 09:45 UK

'They threaten vulnerable people'

By Mark Daly
BBC Scotland investigations correspondent

Paul Walker
A sheriff rebuked the company's director Paul Walker

A BBC Scotland investigation into a property factor has revealed allegations that it was trying to bully clients into paying excessive penalty charges running into thousands of pounds.

Glasgow firm Walker Sandford Property Management looks after several thousand households in the city, but its tactics have led to a series of angry claims by a significant number of its clients.

Some claim that disputed bills of as little as £200 have resulted in debts mushrooming into 15 times that amount.

Around 800,000 households in Scotland rely on property factors for the smooth running of their flats, but earlier this year an Office of Fair Trading investigation found that up a third of clients were dissatisfied.

Many customers complained of having no redress when things go wrong and the OFT urged the industry, which is currently unregulated, to clean up its act.

Over the past months, the BBC has received a series of allegations about Walker Sandford Property Management.

Around 20 case studies have been made available to the BBC. Most of them allege the company denied customers the chance to query disputed bills and pursued them through the courts whilst adding interest and penalty charges.

About 800,000 households in Scotland rely on property factors

Glasgow solicitor Damien Tonner, 29, was taken to the small claims court by the factor after he got into dispute which began over a £200 bill he believed was sent in error more than two years ago.

He said: "According to Walker Sandford I should have paid them £3,300.

"These are management fees of approximately £10 per month common insurance, £28-31 per month split between every owner in the building, and various other charges such as 2.5% interest per month charged on an accumulative basis and reminder letters as many as three per month charged at £15 per letter for a standard letter.

"So you can see how the figure snowballs."

At the court hearing, Sheriff Rita Rae agreed that the amount was excessive. She rebuked the director of the company, Paul Walker, for adding many of the charges and also for the company's poor communication with the client.

'Very scary'

Another Walker Sandford customer, lecturer and film-maker Andy Kennedy, 43, told a similar story. Again Sheriff Rae expressed concern at the mount of penalties levied and in the end Mr Walker agreed to drop all penalty charges and interest.

Mr Kennedy said: "I think they [Walker Sandford] are very well versed in using the courts as a way to threaten vulnerable people who may not have the will or the time or the strength to see it through and defend these escalating costs, because it becomes very scary."

During Mr Walker's case against Mr Kennedy, Sheriff Rae questioned the consistency of what he told the court, saying: "You change with the wind, Mr Walker."

Walker Sandford have been engaged in the systematic ripping off of their customers
Mike Dailly
Govan Law Centre

Walker Sandford currently has almost 200 cases ongoing at the small claims department at Glasgow Sheriff Court, which the BBC understands makes it one of the most litigious factors in Glasgow.

Industry insiders suggest the amount of court cases involving the firm is unusual, and means it experiences substantial difficulty in securing payments from a large number of their clients.

Once a client goes into dispute over a bill and fails to pay, Walker Sandford begins to levy compound interest on arrears at 2.5% which is 30% per year.

It also charges around £17 for reminder letters which can be sent as often as once a week. Then it also applies charges for any legal fees arising from its attempts to secure payment.

Mike Dailly, of Govan Law Centre, believes these types of charges are illegal under common law and is campaigning along with Labour MSP Patricia Ferguson to have them banned.

'Be expelled'

He said: "Walker Sandford have been engaged in the systematic ripping off of their customers and they do that by imposing charges.

"They send out a letter often every week at a cost of £17.62, they also apply compound interest which can be almost 33% over the period and you can have a £10 debt ultimately turning into £1,200 in the space of a year."

Main trade body, Property Managers Association Scotland, of which Walker Sandford is not a member, said: "If allegations of practices such as excessive penalty charges and compound interest were proved against a member of PMAS the member concerned would be expelled."

Walker Sandford has told the BBC it only uses lawful means to recover what is due and to protect co-owners interests. It insists it only goes to court when negotiations with debtors fail.

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