deposit

Tenancy Deposits

hi.. i hold my hands up... did not set up a secure deposit scheme.. in brief.. had tenants move into my property.. needed a home because they were a torn family 2 kids.. in the urgency i didnt set up a secure deposit.. when tenancy ended i gave deposit back in full and all parties were happy with situation and i gave them an extra month - liasing with the council so that they would not become homeless so all parties were happy and satisfied. 4 months later i recieve an aggressive letter from a solicitor stating the deposit they paid me as a security against their obligations under the terms of their assured tenancy and the letter also stated that I HAD PAID THE DEPOSIT back.. the reasons were: i failed to protect deposit with a government backed scheme; and protect the deposit within 30 days; and did not provide the necessary information about the tenancy deposit scheme.. claiming that my former tenants have a claim against me for up to 3 x the deposit for each of the 6 tenancies they had with me mounting to £15,300 plus costs. they have come back with an offer from tenants to settle these proceedings but still a high amount to which im not satisfied. i have 10 days to reply :( any help and advice would be so appreciated.. thanks