All Firstport service charge accounts are entirely separate from the trading arm of Firstport. They cannot be used by Firstport and never have been directly used by them.
Any identifiable service charge fund that is deposited in a recognised service charge account will never be used by the bank to set off any liabilities Firstport may have to them.
This is the only protection that applies to the service charge accounts.
If for example, funds are wrongly allocated to another development, that is not covered.
If funds go missing from the account, by mistake or fraud that too is not covered.
The banks take no reponsibility for how the service charge accounts are administered. they are explicit on this point.
Though technically Firstport do not use service charge funds as part of their trading, they are the masters of getting around the law.
Any other business showing the debts that Firstport is carrying would probably have had the plug pulled on them by the bank.
However unlike other companies, as indebted as Firstport are they are in the unique position of being able to offer any bank that supports them the lore of 240m pounds of service charge money. Not many banks would turn the business down.
As has already been pointed out, Firstport does not directly use service charge funds to trade.
So how do they get around this?
Well, there are various methods they use.
They can use their size to negotiate bulk purchase discount agreements. They then charge the residents the full price and then keep the difference.
They add up to 40% insurance commissions and keep the profits.
They hold back on legitimate insurance claims, or vastly over inflate insurance values in order to receive a rebate, which again they keep.
They invent work that is never needed and receive "incentives" from contractors, or of course, they use themselves in the form of Appello.
They double charge items that are part of the management fee, yet are charged again to the service charge account. watch out in particular for "training fees" They may well change headings of expenditure so this becomes less apparent.
It is believed that the price fixing fraud alone, allowed them to release 1.4m pounds from the service charge accounts.
By these and so many more methods, they are able to liberate service charge funds for their advantage.
