Four directors of Secure My Money Limited (SMM) have been disqualified following an investigation by the Insolvency Service.
The individuals disqualified are: Mark Robert Kennedy for 8 years; David John Carter Mullins for 8 years; Edward John Booth for 7 years; and Christopher Brotherton for 5 years.
All four were the directors who had responsibility for SMM trading with lack of commercial probity from October 2013 whereby SMM:
Kennedy, Mullins and Booth shared responsibility for allowing SMM’s website to remain active, resulting in £181,393 being taken from individual bank accounts, after SMM had agreed with Financial Conduct Authority (FCA) to remove from public access and sight all such offending websites.
At liquidation on 31 August 2014 SMM had liabilities totaling £357,628, with assets estimated to be £6,000.
SMM traded as an internet credit broker from August 2011 using the trading styles/brand names MoneyGaGa (to October 2013); Loan Zoo; Loan Junction; and i-loans direct. After October 2013 SMM allowed one of Mr Kennedy’s other businesses to trade his brand the1loan through SMM.
Up to October 2013 SMM had utilized a platform designed by a former director. That platform was dispensed with and a new platform was introduced by Mr Kennedy, who provided technical expertise and finance to support SMM. Mr Kennedy was only formally appointed as a director of SMM between 30 May 2014 and 11 June 2014, though was the key individual in its operation after October 2013.
Customers came to SMM via other companies (described as ‘affiliates’) websites, called ‘pingtrees’. Customers searched for loans online and input their details. SMM paid for these leads and the customers’ details would be prepopulated into SMM’s website. The customer base for SMM was, in the majority, individuals who had been turned down by lenders.
SMM duped its ‘customers’, who were searching for loans, into paying a brokerage fee of up to £69. SMM effectively did nothing in return for that fee. Its websites and correspondence with customers - and its merchant service provider - made misrepresentations which delayed the refunding of sums to customers. The directors then misled the FCA in stating that SMM’s websites had been shut down, when in fact they had not, resulting in even more moneys being extracted.
SMM also directed customers/enquiries to other brokers, with the consequence that these people were exposed to the potential to be charged a number of times by similar brokers.
In May 2014 the FCA made contact with SMM who promised to make changes to its processes and remove or amend certain webpages. These changes were not done as SMM had promised and the company entered a creditor’s voluntary liquidation on 31 July 2014.
The Insolvency Service investigation, found that SMM:
The Financial Ombudsman Service received 656 customer complaints about SMM between January 2014 and May 2014. On 20 May 2014, SMM informed the Financial Conduct Authority that the websites would be taken down by “…no later than 10am tomorrow”, and thereby made inoperative. Email traffic between the director showed them discussing how the websites would have the appearance of being off-line and unviewable or accessed publicly including “we can always ‘take them down’ for now like the1loan appears taken down but we all know is not.” Between 21 May 2014 and 30 May 2014 the websites remained live and operating, resulting in at least a further £181,393 being removed from customers.
Commenting on the disqualifications, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
This company was a shark feasting in a pool of the most vulnerable and financially distressed. It took advantage of their desperation for immediate funds, and its own technical expertise, to induce the unwary into a trap from which it was difficult to escape.
The system that was created resulted in some of the least financially sophisticated members of society having their banking and personal details pinging around a school of sharks to create a feeding frenzy.
This was utterly cynical and thoroughly reprehensible commercial activity.
The disqualification of the four people directly responsible is a warning to all directors. The Insolvency Service is continuing to pursue the rogues, chancers and recklessly greedy. There will be a direct personal consequence to the activities undertaken behind the corporate veil.
The Insolvency Service would like to thank the Financial Conduct Authority for their co-operation in this case.
Image: Stop the Loan Sharks is a Trading Standards Campaign.