On 11 September 2018, The Financial Conduct Authority (FCA) obtained an urgent High Court Order appointing a Provisional Liquidator in respect of Total Debt Relief limited (TDR), to protect its customers’ money. The FCA is also petitioning for TDR to be wound-up, the petition for this will be heard at a later date.

Stephen Hunt of Griffins Insolvency Litigation Forensics has been appointed as Provisional liquidator. As the appointment is provisional, the management of TDR will have the opportunity to challenge the FCA’s concerns before the Court and to apply to have the appointment of the Provisional Liquidator set aside.

The FCA had concerns over how the debt management company was handling the money of its customers. The FCA has therefore taken various steps to protect the interests of TDR’s clients, ultimately applying for the Provisional Liquidator to be appointed so he can take steps to secure client funds. The FCA has also launched an investigation into the activities of the firm.

The FCA is writing to all affected TDR customers to advise them of the free help and advice that is available to them through the Money Advice Service and will continue to work closely with the firm to ensure that customers are treated fairly.

TDR is a debt management company which operates a full and final settlement model.

This typically sees the customer make payments to the debt management firm which, in turn, makes a minimum or nominal payment to the creditor. The remaining balance of the payment from the customer less fees is held by the debt management firm to create an accumulated fund over time which is then used in negotiations with creditors.