THREE MORE FIRMS FALL AMID TIGHTER REGULATION
This morning news has emerged that three Debt Management companies located in the North West have gone into administration, leaving behind up to 2,500 clients who were actively trying to reduce their debts stuck in limbo. This comes around three weeks after the FCA warned customers to stop making payments after it emerged the companies couldn’t pay their creditors.
The companies are; One Tick, owned by Gary Gregson, Gregson and Brooke owned by Shalles Onido and The Money Management Services, owned by David Brennan. All of the companies are linked through Gary Gregson who was a director in all of the companies.
The companies were located in Bolton. Partners from Duff and Phelps, Corporate Recovery Specialists based in Manchester have been appointed as Administrators. These companies are the latest in a string of closures, since stricter regulation has been introduced by the FCA. Previous failures include Smooth Financial Ltd, First Step Finance and Bournes. It is estimated that around 10,000 clients had debt management plans with these companies and the losses incurred by these clients goes into the millons.
The FCA have warned all debt management solution providers which includes the not-for-profit sector, that they “raise their game” and demonstrate they provide appropriate advice, do not charge unfair fees and have adequate processes for handling client money.
Victoria Raffe, director of authorisations at the FCA, said: “These firms are advising consumers who have often reached rock bottom, so it’s important that firms get it right. Many firms are falling well short of our expectations and they will need to raise their game if they want to continue operating.”
Bev Budsworth, MD of The Debt Advisor Ltd comments “It is clear that the FCA will not tolerate poor practise in the debt management industry. Compliance with FCA regulation is tough and requires debt management companies to be able to evidence that they treat customers fairly. We have seen many debt solutions practices hand in the consumer credit license rather than face the new tough regulation”. Bev adds, “for those remaining in the business of providing debt solutions, the future is bright as long as you get it right”.