Creditors of the collapsed debt management firm Smooth Financial Consultants have been told that as much as £800,000 of their money may not be recoverable, having been used by the ailing company to pay its own costs.
An article in Credit Today outlines how administrators at Royce Peeling Green have identified an estimated shortfall of £848,690 between customer payments and monies due to creditors.
It appears that this money, paid in good faith by clients, may have been transferred to Smooth Financial’s own account in order to attempt to continue trading.
Ultimately, a former landlord of the firm issued a winding-up petition which led to the company’s bank account being frozen; this in turn meant staff could not be paid, and Smooth Financial collapsed on July 31st.
A statement from Royce Peeling Green said: “Payments to creditors have been delayed and the funds which should have been paid to creditors have been transferred to the company’s own current account.”
The debacle means around 3,500 customer records must now be sifted through by hand, in order to identify who is owed what.
In a separate issue also discussed in the Credit Today article, the publication reveals that a former employee of Smooth Financial is now under investigation, after it is believed that the company’s customer database was offered for sale by the unnamed individual.