LONDON, Oct 23 (Reuters) - A husband and wife debt management duo paid for luxury hotels and cars by deceiving more than 4,000 customers who lost in excess of 6 million pounds ($8 million), Britain’s Financial Conduct Authority (FCA) said on Monday.
The watchdog said it banned Adrian and Christine Whitehurst from any involvement in regulated financial services activity. The two were former directors of now-dissolved debt management firm First Step Finance Ltd. Their lawyer had no immediate comment.
The ban is the strongest action the FCA can take, as the misconduct took place in the six years before responsibility for regulating consumer credit was handed to the watchdog in 2014.
The FCA has also referred the Whitehursts to the City of London Police, who are considering the matter, the watchdog said. City of London police had no immediate comment.
The firm’s customers won’t be able to recover their money because the losses are not covered by Britain’s Financial Services Compensation Scheme.
“The Whitehursts were trusted by their customers, who were extremely vulnerable, to help them with their debt problems,” FCA Executive Director for Enforcement Mark Steward said.
“They abused this trust, living a luxury lifestyle at the expense of people who could not afford to lose their money.”
The FCA said First Step’s customers were largely vulnerable people who went to the firm for help to pay off their debts. The firm said it would build up a pot of money for each customer from monthly contributions to pay off creditors.
Instead, the Whitehursts spent over 500,000 pounds on holidays, bars and restaurants, including stays at five-star luxury hotels in Marbella, Venice, Vienna and Greece, the FCA said.
Over 200,000 pounds was spent on luxury cars, including a Bentley, a Range Rover and a Ducati, with significant sums on goods from Hermes and Louis Vuitton, the FCA said.
Last week the FCA began an in-depth investigation into the debt management sector after uncovering poor practices. ($1 = 0.7598 pounds) (Reporting by Huw Jones; Editing by David Holmes)