The mismanagement included withdrawing client funds as fees and incorrectly paying customers.
Stephen Anthony Woolley and Kevin Dursley were disqualified from acting as directors for their actions which caused distress to public members who were already in financial difficulty.
Woolley was the director of Security and Wealth Credit Management Limited, trading as Brightsource Financial Solutions. Dursley was the director of Corders Administration Limited, which administered debt management plans on behalf of Brightsource.
On 16 September 2015, Security and Wealth Credit Management went into administration with debts of £2,058,219 – with Corders going into administration the same day.
The Insolvency Service’s investigation found that Dursley had failed to ensure Corders’ adequate management, supervision and administration of debt management plans on behalf of Brightsource – resulting in losses of at least £443,302.
The investigation found that Corders withdrew £262,456 more than it was entitled to from Brightsource’s accounts, and took this as fees, although the sum should have been returned to client creditors.
Further to that, Corders also incorrectly paid 172 client creditors £180,832 which rightfully belonged to other clients.
In addition, the Insolvency Service found that Woolley had “breached the fiduciary duties he owed to the company” by failing to ensure that Corders handled its administrative responsibilities property, resulting in estimated losses of between £413,657 and £2,042,007 to members of the public already in financial distress.
Consequently, Woolley has been banned from acting as a director for eight years from 11 Jan 2018. While Dursley has been banned for three years and six months from 21 November 2017.
Commenting on the disqualifications, Aldona O’Hara, head of Insolvent Investigations, Midlands and West, said: “This is a serious case where the failures of both companies have caused distress to members of the public who were already in financial difficulty.
“The Insolvency Service will look closely at any evidence of misconduct and take appropriate action where others have suffered as a result of directors’ actions, as has happened in this case.”