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 companys 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.