A director of three debt management firms has been sentenced to 15 months in prison, suspended for two years, and 200 hours of community service for fraud by abuse of position. The case was brought by South Wales Police following its own investigation, and with the cooperation and assistance of the FCA.
Mr David Hall, the director of Debts Reduced Limited, Linked Finance Limited, and a firm set up in his own name (together referred to below as ‘the firms’), was sentenced at Cardiff Crown Court on Friday 8 April 2016.
We have used our regulatory powers to ensure that consumers affected were fully refunded and that the firms did not take on any new business from May 2014.
We provided a witness statement for the prosecution which set out the actions that we took after being made aware of allegations that Mr Hall had acted inappropriately:
- It was alleged that Mr Hall had charged customers £10 per month for an additional product which Mr Hall referred to as a ‘Cover Plan’. Mr Hall stated that this product provided help to customers if their circumstances changed and they were subsequently unable to make payments into their debt management plan, and therefore to creditors.
- Mr Hall was unaware of any contractual basis on which any of the customers consented to this service and was also unaware of any documentation or correspondence initially used to make customers aware they were paying into this service or had access to the service.
- At the request of the FCA, Mr Hall restricted his FCA permissions and agreed that the firms would cease engaging in new debt management business. The restriction took effect on 21 May 2014.
- Mr Hall also agreed to the FCA’s request to wind down the firms in an orderly manner and to focus on returning monies (including those monies accumulated as part of the cover plan) back to the relevant customers.
- On 20 February 2015, having been satisfied that Mr Hall had returned all the monies to the relevant customers, the firms’ interim permissions were cancelled.
Where we become aware of potential criminal activity in markets that we regulate, including debt management, we will work with the relevant law enforcement agencies as well as making appropriate use of our own regulatory powers.
Find out more about how we are helping customers with debt management plans[1].