One of the most well-known debt management firms operating in the intermediary sector has been liquidated, owing creditors more than £2.2 million.
Chase Saunders Ltd, based in Manchester, was voluntarily wound up by its directors following a General Meeting on June 30, according to an Equifax alert. The company has now gone into a Creditors Liquidation which is the correct term for business bankruptcy.
The directors have partly blamed a legal dispute with the Office of Fair Trading (OFT) for the firm’s failure. The creditors’ report, from the company’s liquidator, Colin Thomas Burke of Milner Boardman & Partners, states that Chase Saunders went into liquidation with debts of £2,225,541.50. At the time of its demise, the limited company had just £7,407.50 of cash in the bank. It owed nearly £432,000 to HMRC and almost £58,000 to the Royal Bank of Scotland.
Chase Saunders, which started up in June 1999, employed 77 staff at its peak in December 2009, however staff numbers fell to 27 by May of this year, as its online business ran into trouble following intervention from the OFT. The debt management company had invested heavily in online campaigns, spending £125,000 on Search Engine Optimisation and £500,000 on Pay-Per-Click. However this backfired when the OFT restricted the company’s usage of its website last year, as it was seen to be in direct competition with those of debt charities.
According to the creditors’ report, whilst the legal dispute with the regulator went on, Chase Saunders continued to build new websites, which were closed down by the OFT for being “potentially misleading to clients”.
At one point the regulator enacted its emergency powers to remove the websites, leaving the company only able to use chasesaunders.co.uk.
This was said to have a significant impact on the company’s leads. Another factor responsible for the firm’s demise is listed as a “spiral of rumours and negative reviews of the company on review websites and forums”, which led to the amount of enquiries completing falling from twelve per cent to five per cent.
One review site, reviewcentre.com, features scathing comments from consumers and former clients of Chase Saunders, saying that despite paying £500 in fees in some cases, their creditors were never paid.
The last comment, from August 3 2010, states: “I used to work for Chase Saunders, and I am please (sic) to advise everyone that they have gone bankrupt, that is the good news, the bad news is that they have changed their name and in some part will continue trading, so beware. ” Former directors of Chase Saunders declined to comment on the firm’s negative reviews, but assured Debt Management Today that its clients are being managed by a separate debt solutions company, In Touch Financial Services. In Touch Financial Services is currently operating out of Chase Saunders’ offices. Debt expert and director of Atlantic Financial Management, Kevin Still, said that the demise of the debt management company should be a warning to other firms.
He said: “The OFT has significantly stepped up its activities with regard to compliance with the OFT Debt Management Guidance and in particular misleading advertising, including websites. Many debt management companies that were reliant on web advertising and lead generating sites have paid the penalty for not heeding the warnings issued by the OFT.” The Chase Saunders website is still up and even proclaims: “The more debt you are in the more we can help”.
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