A business that advertised itself as a ‘one stop shop’ for dealing with bankruptcy has been ordered into liquidation following an investigation by The Insolvency Service.
UK Bankruptcy Limited (UKB), which was based in Dorset, but incorporated in Edinburgh, attracted clients through advertising and referrals from another official looking website called ‘IVA Council’. The investigation found the company derived the majority of its income from fees charged to clients who used UKB to make themselves bankrupt. The fees, often running into thousands of pounds, bore no correlation to the work undertaken or the extent of the clients’ level of debt. The advice given was often very basic and could easily have been obtained for free.
In some cases the fees charged to clients’ credit cards rolled into the ensuing bankruptcy whilst the amount of fees appeared to equate to the amount of credit still available on their cards. This action meant that, in effect, the clients’ creditors were funding the company’s fees with no prospect of repayment. The investigation also found evidence that some clients allowed the company to maximise the amount of fees charged to their cards, in return for which they were given “cash back””.
