Couple who duped vulnerable customers out of £6m banned by FCA

A married couple from Stockport have been banned from working in the finance sector by the Financial Conduct Authority after they deceived more than 4,000 customers out of £6m.

Adrian and Christine Whitehurst, aged 55 and 54 respectively, ran Manchester-based First Step Finance, a debt management company licensed by the Office of Fair Trading from 2007 to 2013.

The OFT revoked the company’s licence in October 2013 after finding it had engaged in “deceitful, oppressive, improper and unfair” business practices.

The FCA took over the regulation of consumer credit in April, 2014 and has now banned the Whitehursts from any involvement in regulated financial services activity.
The FCA has also referred the Whitehursts to the City of London Police, who are considering the matter.

First Step’s clients were largely vulnerable individuals who went to the firm for help to pay off their debts.

The firm told customers that it would build a “pot” of money for each customer and that it would use it to make a full and final settlement of their debts with the customer’s creditors.

First Step received monthly payments from its customers, who were told that the money would be held in a ring-fenced account (as required by the OFT).

However, the Whitehursts in fact used clients’ money to fund their businesses and a luxurious lifestyle.

They spent more than £500,000 on holidays, bars and restaurants, including stays at five-star luxury hotels in Marbella, Venice, Vienna and Greece; over £200,000 on luxury motor vehicles, including a Bentley, a Range Rover and a Ducati; and significant sums on luxury brands, including goods from Hermes and Louis Vuitton.

Upwards of £1m of cash was transferred to Mr Whitehurst for his personal use. In addition, more than £1m of client money was used for the benefit of firms associated with the Whitehursts and over £2.2m of client money was used to fund First Step’s expenses.

The firm’s customers are unable to recover their money as the losses are not covered by the Financial Services Compensation Scheme, and as such were left with continuing debts.

Mark Steward, executive director of enforcement and market oversight for the FCA, said: “The Whitehursts were trusted by their customers, who were extremely vulnerable, to help them with their debt problems. They abused this trust, living a luxury lifestyle at the expense of people who could not afford to lose their money.

“They showed complete disregard for the consequences of their actions and we have taken the strongest action possible in preventing them from operating in financial services again.”

The ban imposed by the FCA is the strongest sanction available in this case, as the Whitehursts’ conduct took place before the responsibility for regulation of consumer credit was transferred to the FCA.

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