A PPI claims management company shut down for mis-spelling and a claims consultant banned for compensating himself ahead of HMRC show a sense of irony is no defence for impropriety.
Compensation consultant overcompensates himself
Richard Render, a director of the Manchester-based Total Care Consumer Solutions, has been disqualified as a company director for six years from 8 December 2014. The ban was handed to the claims and compensation consultant following an Insolvency Service investigation.
The investigation found Mr Render had failed to pay tax, choosing to compensate himself instead. As a result of the disqualification, he cannot control or manage a company without leave of the court until 7 December 2020.
Failing to act in the best interests of creditors
Mr Render’s company went into liquidation on 3 July 2012. By this time he owed at least £246,510 to HMRC following his failure to pay VAT from 1 May 2009 and PAYE/NIC from 19 April 2010. He also failed to file Corporation Tax returns for the period ending 6 July 2007.
Mr Render paid himself a total of £154,135 during this time, despite knowing the company was insolvent. This included six payments between 15 December 2011 and 30 March 2012 to the value of £98,000, in addition to a further payment of £30,000 which was marked as a bonus.
The claims consultant also chose to reduce his personal loan to the company from £30,515 to £2,500 rather than repaying his creditors.
Neglect of tax affairs is not a victimless crime
Welcoming the decision, Robert Clarke, Head of Insolvent Investigations North at the Insolvency Service, said: “Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes and must not benefit themselves at the expense of creditors.
“Neglect of tax affairs is not a victimless action as it deprives the taxpayer of the funds needed to operate public services.
“The Insolvency Service will take action against directors who do not take their obligations seriously and abuse their position”.
PPI misselling claims company guilty of mis-spelling
Bradford-based Payment Protection Insurance (PPI) claims management company, Redress Financial Management Limited, has been wound-up by the High Court for the misuse of client funds.
The Insolvency Service investigation found that trading under the name Redress Claims, the company had charged customers an upfront fee of anywhere between £95 and £395, along with a percentage of the total fee recovered. The company’s services included PPI services, mis-sold mortgage and credit card claims, and unenforceable credit agreements.
The following information from the Ministry of Justice, the Insolvency Service investigation revealed numerous examples of the company misusing client funds. Not only did it take unauthorised payments from clients, it also failed to file statutory accounts or operate a proper complaints procedure to the detriment of its customers.
Flagrant disregard for the rules
In response to the findings, Alex Deane, Investigation Supervisor with the Insolvency Service, said: “The company operated with flagrant disregard for the rules governing claims management services and proper financial controls.
“The investigation and subsequent legal action taken by the Insolvency Service were long and complex and I would like to thank officials from the Ministry of Justice for their assistance in bringing the company’s activities to an end.
“Those responsible for such companies should be aware that the Insolvency Service can and will take firm action against companies which operate in this manner”.