Error by watchdog blamed as loans firm fails

AN apparent error by the financial services regulator the FCA dealt a mortal blow to a Stockport finance firm, which has collapsed with 117 job losses.
 
Loans call centre Cash Finance Direct (Holdings) Limited, trading as Horizon Finance, has been placed into liquidation.

Francesca Tackie and Gary Lee, partners at the Manchester office of Begbies Traynor, who have been appointed as joint liquidators said an incorrect notice posted by the Financial Conduct Authority late last year caused irreparable cash flow and reputational damage to the company.

Begbies Traynor said Horizon, which sold loans over the phone on behalf of lenders, ceased trading on March 27 after data providers stopped supplying the company in the mistaken belief that the firm was not authorised by the Financial Conduct Authority (FCA).

A statement added: “This followed an incorrect notice placed on the FCA website late last year, which stated that the company was not authorised, due to confusion with a similarly named firm. This led to cash flow and operating difficulties as data providers stopped sending business to the company.”

Commenting on the liquidation, Francesca Tackie said: “Cash Finance Direct was severely affected by the erroneous notice placed on the FCA website as nervous data providers stopped sending work through, fearing they were dealing with an unauthorised company.

“Whilst the FCA later issued a public apology on its website, the company never fully recovered and was unable to trade out of its difficulties.”