Press release

Firm shut down for falsely offering ‘early resolution’ to IVA debt solutions

Firm offered advice on early resolution to customers’ IVA debt solutions despite not being licensed to provide financial or debt advice

From:
The Insolvency Service
Published
23 October 2024

  • McKenzie Jones Associates charged fees to help end customers’ IVAs early 

  • The company promised full refunds if IVAs did not reach an early solution – but investigators found no evidence that refunds were made 

  • Investigation found the firm had taken almost £55,000 in fees for this service, but a lack of company records prevented its full financial position from being uncovered 

A company which claimed to help customers reach an early resolution to their Individual Voluntary Arrangements (IVAs), but instead exposed them to the risk of their debt solution failing, has been closed down. 

McKenzie Jones Associates, which was last registered to an address in Kent Road, Formby, near Liverpool, was wound up at the High Court in Manchester on 22 October 2024. 

The company sent unsolicited letters to people who had an IVA, which led to offers to help secure an early resolution to the debt solution for a fee.

IVAs are legally-binding agreements with creditors to pay all or part of a person’s debts, and usually last about five years. 

Sales staff for the company told customers it would refund the fee if it did not achieve an early resolution of their IVAs. 

The company also falsely advised customers that their IVA supervisors – the Insolvency Practitioners administering their debt solutions – must place the IVAs on hold and suggested that customers should refuse to speak to their IVA supervisors if they contacted them.

However McKenzie Jones Associates was not registered with the Financial Conduct Authority to provide debt advice, and their advice exposed customers to the risk of their IVAs failing.

David Usher, Chief Investigator at the Insolvency Service, said

McKenzie Jones Associates took advantage of people in debt to offer them a solution that was unlikely to work and gave advice which jeopardised the success of their IVAs. 

The Insolvency Service has powers to remove companies that operate against the public interest. 

We will shut down businesses that prey on people facing tough times and protect the public from further financial harm. 

The company generated custom by sending letters to people listed on the Individual Insolvency Register, inviting them to call a freephone number to discuss ‘financially beneficial information’. 

Those who responded were offered help to encourage their IVA Supervisors to propose an early resolution of the IVA, known as a ‘Paid to Date’ solution, to their creditors. 

Sales staff for McKenzie Jones Associates advised customers that they would use ‘new government legislation’ to help them exit their IVA. But investigators found this ‘legislation’ was in fact guidance for Insolvency Practitioners on specific considerations for recommending a Paid to Date solution. 

One customer was told that she would be debt free in six months if she used the company’s services. 

But in reality the likelihood of such an early resolution was very low. 

The firm typically charged a £450 fee, paid over six instalments of £75.

Their customer records showed 424 files related to Paid to Date, and investigators found that the company had received at least £54,900 from clients under the Paid to Date scheme, but had made no provision to pay refunds. 

None of the customers who responded to the investigation had benefited from the services offered by the company or received a refund. 

And as the firm’s directors failed to maintain or hand over all the company’s books, investigators were unable to establish the true financial position of the company, including the full amount it had received under the scheme, or the amount McKenzie Jones Associates had refunded – if any – to clients.

They were also unable to verify the accuracy of accounts filed for the periods ending 31 December 2020 and 31 December 2021, or confirm whether receipts of £128,996 and payments from £129,046 in McKenzie Jones Associates’ bank accounts were legitimate business transactions. 

McKenzie Jones Associates ceased trading in April 2023. 

The Official Receiver was appointed by the court as liquidator of the company. All enquiries concerning the affairs of McKenzie Jones Associates should be made to the Official Receiver of the Public Interest Unit: 16th Floor, 1 Westfield Avenue, Stratford, London, E20 1HZ. Email: piu.or@insolvency.gov.uk.

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Published 23 October 2024