Loan broker wound up by Insolvency Service for misleading clients - More Financial

fermi

---> Loan broker wound up by the Insolvency Service for misleading clients

22 August 2013 10:45

Insolvency Service



More Financial (MFL) Ltd, a loan brokerage company that took money from people in financial difficulties based on misleading claims, was wound up by the High Court on 19 August 2013 following an investigation by the Insolvency Service.

The petition to wind up the companies was brought on behalf of the Secretary of State for Business, Innovation and Skills in the public interest.

MFL was wound up for taking a “brokerage” fee from clients seeking loans, based on misleading claims made on a number of websites and through telephone sales.

The company claimed that its services left virtually no chance of failing to get a loan and that more than 90 per cent of its lenders were not on other comparison websites. It also claimed that it did not charge up front fees, while charging £69.50 ‘processing fees’ for presenting the client with a lender and lender options.

In fact, none of those claims were true and all MFL did was to provide details of lenders to the clients who would then have to apply separately.

Investigators found that over 50,000 customers had paid the up-front fee between January 2012 and January 2013, including over 10,000 in January 2013 alone. Only one client in every thousand appears to have been successful in their applications.

Furthermore, there were claims that the company deducted fees from the bank accounts of clients without permission.

Because of the lack of transparency with which the company operated, clients were unable to obtain refunds or make complaints either by telephone or by email.

These failings were aggravated by the fact that;

• The company was controlled by an individual not named as a current director at Companies House and who regularly used an alias.
• The directors and shareholders failed to co-operate and actively hindered the investigation.
• The company failed to maintain or preserve adequate trading records.
• The company filed false or unverifiable accounts at Companies House.
• Over £1m was taken from the company’s account after the investigation started without proper explanation.

Commenting on the case, Alex Deane, an Investigation Supervisor with the Insolvency Service, said:

“This company targeted individuals, many of whom were already in financial difficulties, and promised loans which it failed to deliver. This is unacceptable and the winding up orders should serve as a warning that the Insolvency Service will close down companies that operate in this way.”


Notes to Editors

1. More Financial Limited was incorporated on 17 November 2009 and its last registered office was at Winton House, Winton Square, Basingstoke, Hampshire, RG21 8EN, the address of its accountants.
2. The petition to wind up the company in the public interest was presented to the High Court under s124A of the Insolvency Act 1986 on 13 June 2013 following confidential enquiries carried out by Company Investigations under section 447 of the Companies Act 1985, as amended.
3. A provisional liquidator was appointed to the company on 13 June 2013 and the company was wound up on 19 August 2013.
4. Company Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Innovation & Skills (BIS). Further information about live company investigations can be found on our website at http://www.bis.gov.uk/insolvency/Companies/company-investigation
5. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The agency also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.bis.gov.uk/insolvency.
6. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, The Insolvency Service, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531. Email: [EMAIL="piu.north@insolvency.gsi.gov.uk"]piu.north@insolvency.gsi.gov.uk[/EMAIL]

gb12345

One down ... many more to go.

Apples2

This is hardly a revelation, ALL the loan brokers operate in the same way.

Hopefully it will get some running scared.

I wish the report had stated how many actually received a refund after following the terms, it'd certainly shoot me down in flames if they weren't refunding after following the terms (shame not many did anyway).

10,000 in one Month alone :eek: :eek: how can we have failed education so much and ended up with so many prepared to simply throw such details out at a whim?

Tixy

Investigators found that over 50,000 customers had paid the up-front fee between January 2012 and January 2013, including over 10,000 in January 2013 alone.

:eek::eek:
Shocked, really shocked. Multipy that by the number of very similar sites around and that is a heck of a lot of people who are either very desperate or very naive (or both).

Only one client in every thousand appears to have been successful in their applications.

Not shocked . If only the type of people who apply would do some basic research first.

gb12345

Apples2 wrote: »

I wish the report had stated how many actually received a refund after following the terms, it'd certainly shoot me down in flames if they weren't refunding after following the terms (shame not many did anyway).

I would guess that this firm were the bottom level of the low-life scale and weren't clever enough to avoid the attention of the authorities by refunding people who follow their T&Cs. Other firms are likely to be a bit more savvy and actually refund those that jump through their hoops.

imoneyop

Tixy wrote: »

:eek::eek:
Shocked, really shocked. Multipy that by the number of very similar sites around and that is a heck of a lot of people who are either very desperate or very naive (or both).

I wonder how many people you would find though whose details appear on multiple sites, having paid multiple times in the hope of getting a loan.

Clive_Woody

I am going to set up a consultancy advising people not to be so daft and I will only charge £1 a go. At 50,000 clients a year it will make a healthy second income.

tonycottee

So a company is created with the aim of fleecing as many people as possible.
I know, let's all point and laugh at the people who fell for it.