A Staffordshire-intermediary has ripped off four working men's clubs, to the tune of £700 in one case, by charging them massively-inflated administration fees for placing their premiums, Insurance Times has uncovered this week.

Lloyd Manley director John Bateman admitted that he first knew that West Sutton Labour Club in St Helens had unnecessarily paid nearly £700 in administration fees in June 1999.

The intermediary first placed the £2,353.73 premium on a sub-agency basis through wholesale broker John Beard in March 1999, but charged the West Sutton Labour Club £2,915.88. The policy was underwritten by Norwich Union.

Lloyd Manley, which resigned from the statutory regulatory regime, the IBRC, in 1990, then collected 12.5% in commission.

Bateman said the intermediary failed to return the money when the over-charging came to light because they were under-staffed.

The grossly-inflated premium was then renewed this year on March 29, this time for £3081.44, including a fee of £700.

“We were short-staffed and it should have been corrected,” he said.

“I do not have a good excuse – I would not even offer one. It will not happen again.”

He added that the Lloyd Manley knew of three other clubs that had been charged excessive administration fees, and they would be contacted shortly.

“These clubs should have been charged about £50 in administration fees, but three of them were charged between £200 and £300 and one of them was charged more than £700 too much,” Bateman said.

A West Sutton Labour club spokesman said they were unaware that they had been charged administration fees.

“If we have been ripped off, we will be taking this matter up with our MP,” said club secretary Dennis Marsh.

Bateman said that he and his co-director Graham Pedley would be conducting a thorough investigation into the incident, which he blamed on a former employee Joe Coy who left the company in April 1999.

Joe Coy has admitted to placing premiums with excessive administration fees when he was at Lloyd Manley, but said he was unaware at the time that it was wrong not to inform the club of the level of fees.

Bateman said he did not expect to find any other incidents among the 300 other social and sporting clubs that the intermediary has on its books.

Although Bateman was un-willing to name the other clubs, Insurance Times has obtained a dozen-strong list of clubs where fees appear to be excessive.

Most of Lloyd Manley's working men's clubs business is placed through either the insurer Groupama or the Clubsure scheme put together by broker John Beard.

Both companies said they have launched immediate investigations.

John Beard said he became aware of the high fees a couple of weeks ago but only managed to gain written confirmation this week.

He said: “As of Tuesday, we recieved a fax from a broker we had asked to go and visit a club we insure and it would appear that the client has been substantially overcharged. We are looking into every file where we have a client via Lloyd Manly, and we are writing to the clients direct to ascertain whether there are other examples.”

Insurance Times provided in formation to Groupama and the marketing manager Jamie Marchant said: “We are extremely concerned about the situation and are contacting Lloyd Manley immediately. We have immediately launched an investigation.”

Lloyd Manley has two offices, in Bidduplh near Stoke-on-Trent and Chesterfield, and writes a mix of personal and commercial lines buisness. It employs nine staff in total.