The Financial Conduct Authority (FCA) has banned a debt management couple for misappropriating client money to fund a lavish lifestyle.
Adrian and Christine Whitehurst, who were former directors of the now dissolved debt management firm First Step Finance Limited, lost 4,000 customers in excess of £6 million, according to the watchdog.
The FCA described First Step's clients as predominantly 'vulnerable individuals', who went to the firm to help clear their debts.
The firm told customers that it would build a ‘pot’ of money for each of them and that this would be used to make a full and final settlement of their borrowing.
First Step received monthly payments from their customers, who were told that the money would be held in a ring-fenced account, as required in regulation.
However, the FCA said the couple used the cash to fund their business and luxurious lifestyle.
This included around £500,000 spent on holidays, bars and restaurants, including stays at five-star luxury hotels in Marbella, Venice, Vienna and Greece and £200,000 on luxury motor vehicles, including a Bentley, a Range Rover and a Ducati.
They are also said to have spent 'significant' sums on luxury goods from the likes of Hermes and Louis Vuitton.
The FCA said more than £1 million worth of cash was transferred to Mr Whitehurst for his personal use. In addition, over £1 million was used for the benefit of firms associated with the Whitehursts and over £2.2 million of client money was used to cover First Step’s expenses.
The firm’s customers are unable to recover their money as these losses are not covered by the Financial Services Compensation Scheme, leaving them faced with continuing debts.
FCA executive director of enforcement and market oversight, Mark Steward, 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 Whitehursts ran First Step Finance from 2007 to 2013.
The Office of Fair Trading, at the time the regulator of the sector, revoked First Step’s licence in October 2013 after finding the firm had deceitful, oppressive, improper and unfair business practices. The FCA took over the regulation of consumer credit in April 2014
The City watchdog has also referred the Whitehursts to the City of London Police.