A secured lender where people use their cars as security has sold off assets after entering administration.
Insolvency News understands a deal was struck for the majority of Log Book Loans – which had its consumer credit licenses revoked – shortly after it fell into administration.
Nine Regions Ltd and Log Book Loans Ltd – both traded as Log Book Loans and went into administration on February 13.
In November 2011, the companies lost their appeals to have their licenses revoked at a tribunal after the Office of Fair Trading (OFT) ruled they were ‘unfit’ to hold them.
At the appeals hearing Log Book Loans admitted thousands of letters had been sent to borrowers in the name of a firm called Adams Spencer & Phillips (ASP) falsely threatening legal action on behalf of Nine Regions.
Gareth Roberts and Paul Ellison of RSM Tenon were appointed administrators for the company.
A buyer is understood to have been lined up in advance, although Insolvency News has been told it was not a pre-pack deal.
Log Book Loans had the power to seize borrowers’ vehicles without going to court and could pursue them for any debt shortfalls after the vehicle had been sold.
But the first-tier tribunal found letters were sent to borrowers giving them a false impression ASP was authorised to undertake legal duties on behalf of Nine Regions.
It discovered ASP had no employees and engaged in ‘deceptive’ practices with Nine Regions employees pretending to be ASP staff as part of a ‘deliberate deceit’ also involving solicitors and the Financial Ombudsman Service.
At the time, David Fisher, OFT’s Consumer Credit Group director said: “Intentionally deceiving debtors as part of a debt collection policy is an extremely serious matter, which calls into question a licensee’s fitness.
“We expect businesses licensed by the OFT to treat all their customers, including those in arrears, fairly and transparently.”
According to Log Book Loans’ website the company provides a genuine ‘regulated and licensed lender of last resort’ service.
The website states ‘but for the lawful and decent service we provide, customers would be forced into the arms of unregulated and unlawful money lenders, with serious and dangerous ramifications’.
Nine Regions’ latest accounts filed until February 23 showed the company made a gross profit of £16,493,721 but also had net assets of -£7,906,493.
According to company records both Nine Regions and Log Book Loans boasted the same directors with their registered addresses in Putney, south-west London.
One director David Barnett is also listed as a director of Log Book Loans (UK) Regions as well as Log Book Card Collections.
Meanwhile, fellow directors James Dawes and Iain Shearer are both listed as directors of Capca Holdings.