Welsh government £290,000 training grant defended
A £290,000 grant awarded to a company owned by a family behind a debt firm which was stripped of its operating licence last year has been defended.
Cwmbran-based Yes Loans was told to stop selling loans by the Office of Fair Trading (OFT) for "deceitful and oppressive" practices in March 2012.
A new firm, We Fight Any Claim, says the grant pays for staff training with cash going directly to the providers.
The Welsh government has rejected Tory AM Nick Ramsay's calls for a review.
The Skills Growth Wales grant assists companies who plan to expand their workforce and need funding for training to make this possible.
The grant was given to Cwmbran-based We Fight Any Claim to go towards training their 226 call centre staff with no money going to the company itself.
The new firm focuses on handling claims for mis-sold payment protection insurance.
But the Welsh Conservatives' shadow business minister Nick Ramsay said: "If they are the avenue of the money, they are involved in it.
"At the end of the day, it's public money. It's the people's money and it needs to be completely transparent.
"I'm going to ask the business minister (Edwina Hart) to review this as quickly as possible.
"We expect funding to be given to schemes supporting jobs but I don't think this is the right way."
A Welsh government spokesperson said £70,000 of the £290,000 grant had been committed for the firm to carry out a Business Improvement Techniques training programme.
"As with all of Skills Growth Wales grants, whilst the grant recipient will be We Fight Any Claim, the payments for training will be made directly to the training providers and only in arrears, on completion of training," the spokesperson added.
"Grant funding was awarded following our approval of a business case that outlined plans for growth as a result of new markets and new products, resulting in the creation of up to 75 jobs."
Job creation will be monitored every six months to ensure We Fight Any Claim, which employs almost 400 people in south east Wales, is progressing with the growth as outlined in its business case application.
Managing director Simon Chorlton said Mr Ramsay had "missed the point entirely".
He said: "In terms of the award of monies from the Welsh government under the Skills Growth Wales team... this is money that as a company we put together a clear business case for and presented that to the Welsh government, who will of course have undertaken the fullest of checks to ensure the money was being used correctly.
"To be clear, we as a company are not awarded a single penny of this money. We simply receive accredited training, from approved training providers in Wales, to enhance the personal development of our staff, and to allow us to create new jobs in our workforce, in what is an area of relatively high unemployment."
Mr Chorlton pointed out that the company was regulated by the Claims Management Regulator, and regularly underwent audits from the Ministry of Justice.
In March 2012, previous company Yes Loans was stripped of its credit licence by the Office of Fair Trading (OFT).
As a credit broker, Yes Loans was supposed to introduce people who were looking for a loan to businesses willing to provide this unsecured credit.
The OFT found that Yes Loans misled some customers into believing that it was a loan provider rather than a credit broker.
It deducted fees from people's cards, without making it clear that a fee was payable, and failed to provide refunds in good time.
In some cases, customers were not matched with the loan they wanted, but to a short-term, high-interest product instead.
After the OFT investigation in 2009, Yes Loans changed some of its practices, and no longer took upfront fees, but the regulator decided the firm had not done enough to improve its operations.