FCA bans four broker bosses who falsely approved customers for loans
The Financial Conduct Authority has banned four credit broker bosses for taking £7.2m in fees from customers who were duped into thinking they had been approved for short-term loans.
Secure My Money Limited, who has now been dissolved, duped 124,000 online customers by charging them between £39 and £69 and then presenting them with a list of web links primarily to lender website homepages.
The FCA banned David James Carter Mullins, Edward John Booth, Christopher Paul Brotherton and Mark Robert Kennedy – all of which it concluded “lacked honesty and integrity” for their behaviour between November 2013 and July 2014.
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.”
The FCA found that the four brokers deliberately misled often vulnerable customers related to fees and services provided through online brands i-loansdirect, LoanZoo and the1loan.
Customers searching for loans online were informed on arrival at the websites they had been ‘approved’.
They were shown details of a sample loan and were asked to enter their payment card details in order to ‘verify their account’.
Customers were not pre-approved for a loan and there was no such account verification. Their cards were instead charged between £39 and £69.
Many of Secure My Money’s customers, including those least able to afford the fees, were unaware a fee would be charged.
The sites’ membership areas then purported to provide a list of pre-approved loan offers. In reality, Secure My Money had no contact or arrangements with any lenders.
The FCA asked Secure My Money to take down it websites in May 2014.
The four bosses knew however that the majority of customers arrived on the sites via other pages, that those pages were still live and that SMM was still taking fees from new customers.
From late May 2014, the firm started charging customers a further monthly fee of £4.99 for continued access to membership areas.
To increase revenue, Kennedy subsequently arranged for the £4.99 charge to be backdated to March 2014. Mullins arranged for customers clicking on lender icons in the membership areas to be redirected to other fee-charging credit broker websites.
The sale of customers’ personal data to third parties led to some customers receiving multiple marketing calls or texts, and in some instances to customers being charged by more than one credit broker.
Secure My Money went into liquidation on 31 July 2014.
Around £1.4m was repaid by the firm as a result of customers either requesting chargebacks from card providers or making refund requests direct to the firm, and a further £33,564.17 was paid out after the liquidation.