Two Handforth-based companies that claimed to offer debt management services to clients in financial difficulties, have been wound up by the High Court on public interest grounds following an investigation by the Insolvency Service.
Debt Help Direct Limited and Money Worries Limited, both run by John Taylor-Groom and based at The Paddock, were wound up for taking money from clients but failing to pass it on to creditors as expected.
The petition to wind up the companies was brought on behalf of the Secretary of State for Business, Innovation and Skills.
The investigation showed that both companies targeted people who were unable to pay their debts and set up debt management plans in which the clients paid a regular amount to be distributed to the creditors.
However, the investigation showed that, even though between them, the companies received over £1.3m from clients in a two-month period in early 2013, a large proportion appeared not to have been paid to the creditors.
Furthermore, Debt Help Direct Limited owed over £125,000 in overdue tax to HM Revenue and Customs, while Money Worries Limited owed just over £420,000.
Commenting on the case, Alex Deane, an Investigation Supervisor with The Insolvency Service said: "These companies targeted individuals who were already in severe financial difficulties and the 'services' provided by these companies simply made matters much worse.
"They claimed to offer a service and failed to deliver. The winding up orders should serve as a warning that the Insolvency Service will crack down on companies that operate in this way.
"The Insolvency Service recently launched proposals for a debt management plan protocol to ensure that consumers who pay for advice and assistance with managing their debts are protected."
