Broker acting as lender closed down

Broker acting as lender closed down


An investigation by the Insolvency Service has resulted in a Manchester-based company offering loan brokerage services being wound up.

First Money Direct Limited was shut down by the High Court after the company reportedly failed to arrange the loans it had promised clients.

On its website, First Money stated it was: “ideally suited to offer loans and financial solutions to a wide range of clients, especially those who have previously been turned away by other lenders,” CreditMan reports.

According to clients, the company – which was actually a brokerage – purported to be a lender. Despite not keeping clear records, it is alleged the firm received at least £360,000 worth of fees from clients.

Potential customers contacting the company were told the loans they wanted were guaranteed or already approved and then had to pay an administration fee, which was either £49.95 or £99.95.

Despite paying this fee, the clients’ loans were either not arranged or customers were only offered unfavourably termed loans that differed from the original agreement. Further to this, CreditMan reports that numerous clients were either only partly refunded or not refunded at all.

Colin Cronin, the Investigation Supervisor, said: “First Money Direct Limited used misleading methods to obtain fees from clients by claiming that their loan applications had been approved or were guaranteed when, in reality, the company was doing no more than gathering information for onward submission to lenders.

“Those behind such companies should be aware that the Insolvency Service will take firm action when the public are deliberately misled in way.”

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