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Loan broker wound up 23 August 2013

A loan brokerage company has been wound up in the public interest by the High Court following an investigation by The Insolvency Service.

More Financial (MFL) Ltd was wound up on 19 August following a petition 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.

Alex Deane, investigation supervisor at 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.”

MFL claimed its services almost guaranteed customers would get a loan, as well as claiming not to charge upfront fees – while charging a “processing fee” of £69.50 for presenting customers with lender options.

The High Court heard that MFL simply provided details of lenders to the clients who would then have to apply separately.

Investigators found that over 50,000 customers had paid the “processing fee” between January 202 and January 2013, including over 10,000 in January 2013 alone. Only one client in every 1,000 appeared to have been successful in their applications.

The investigation also heard claims that the company deducted fees from the bank accounts of clients without permission.

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

 

 

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