- Posted by Michael McKee
- On 13 August 18
- Broker, Consumer Credit, Directors, Enforcement, FCA, Financial Conduct Authority
On 25 July 2018, the FCA published final notices banning David James Carter Mullins, Edward John Booth, Christopher Paul Brotherton and Mark Robert Kennedy, the former directors and shareholders of online consumer credit broker Secure My Money (SMM) for misleading customers.
By way of background, individuals searching for loans online who landed on the SMM websites were informed that they had been “approved” and were shown details of a sample loan. They were then asked to enter their payment card details in order to “verify their account”. However, no pre-approval or account verification, in fact, took place, instead their cards were charged between £39 and £69.
As a result, the FCA found that between November 2013 and July 2014 the four individuals lacked honesty and integrity as they had deliberately misled vulnerable customers in relation to fees and services provided through web-based brands i-loansdirect, LoanZoo and the1loan.
In May 2014, the FCA asked SMM to take down its websites. SMM disabled the homepages, informing the FCA that it had taken them down for new customers. However, all four individuals knew that most of their customers arrived on the sites via other pages, that those pages were still live and that SMM was still taking fees from new customers. In total, firm took fees of over £7.2 million from approximately 124,000 online customers. Approximately £1.4 million was repaid by SMM as a result of customers either requesting chargebacks from card providers or making refund requests direct to the firm. SMM went into liquidation on 31 July 2014, and a further £33,564.17 was paid out.
All four individuals were disqualified as directors for periods of between 5-8 years by the Insolvency Service, and the FCA banned them from performing any function relating to any regulated activity “for life or for as long as necessary for consumer protection”. The FCA has also explained that the bans are the strongest sanction it could impose because the relevant conduct took place before the FCA was given the power to fine individuals at consumer credit firms.
Commenting on the development, Mark Steward, Executive Director of Enforcement and Market Oversight, said: “These four individuals consistently misled vulnerable customers into paying money for worthless services and into believing SMM had found them a loan, in addition to selling on their data. They showed complete disregard for the consequences of their actions. We have taken the strongest action possible to prevent them from working in financial services again”.