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I agree, it sounds like they're trying to get money using threats. If they had to go to court it would be too hard and would quickly become obvious that they do this for a living...

Kath It sounds like they do this for a living. Did they actually pay any rent while they lived in your property? I think in regards to item 1, I'd pass the evidence of your attempts to contact them to a solicitor and let him write a final letter. In regards to claims, I'd contact the insurer...