Legal Options against Bank/E-money service in Liquidation

[samusuk82]

I owned a bank account (technically an e-money account, non-FSCS protected) with U Account (provided by Wire Card Solutions Ltd) in 2020.

In 2020, the bank decided to suspend my account pending a review. They asked me to provide proof of entitlement for the funds in the account as I had multiple revenue streams (I managed properties and had money from tenants deposited into the account).

Eventually, my account was closed and I was told the funds remaining in the account would be "returned to source." But due to the multiple payments going in, I wasn't sure who they were referring to specifically, and they didn’t make me aware of where the funds would be sent. I made several enquiries about this, but never received a response.

I made a complaint that progressed to the Financial Ombudsman. During this time, the company went into liquidation, but eventually the Ombudsman was able to progress matters with the company's liquidators. Eventually, the Ombudsman ruled that the company should provide full details of where the funds in my account were sent and how.

The liquidators have claimed the funds were sent as cheques to a gambling company I was using at the time. I asked for specific details, but to date they have not even been able to provide a date the cheques were issued. It may be that the company no longer has access to detailed financial records. They can present no evidence to show the funds were even sent.

I contacted the gambling company in question and escalated a complaint to their highest level. They have stated that they do not accept cheques as their payment provider does not permit this. Even if the cheques had been issued, they would not have been able to process them.

I am now in a difficult position. The Ombudsman ruling states the company must provide me with full details of these missing payments, but it doesn't specify what should happen if they are unable to do so.
I would like to consider the option of pursuing this through the small claims court, but I don't know if this is even possible as the company is in liquidation.

I assume I would first need the company to accept liability for the missing funds. Would I need to make a case in the small claims court do establish this? If so, do I make a claim against the bank or the liquidators?

As there is an Ombudsman ruling (that I have agreed to), what happens in the event the company does not comply with the agreement? Can the liquidators use this as a defence in the small claims court if I make a claim for the funds as the Ombudsman didn’t rule they owed me the money directly, or would the FOS ruling be considered irrelevant as the company didn't meet the requirements?

Any advice would be greatly appreciated!

[atticus]

If the company is in liquidation you may only pursue court action against it with consent of the liquidator or permission of the court. You should lodge a claim with the liquidator by filing a "proof of debt". If your claim is rejected, you may bring court action challenging that rejection, but must do so quickly, I think within 21 days.

[samusuk82]

If the company is in liquidation you may only pursue court action against it with consent of the liquidator or permission of the court. You should lodge a claim with the liquidator by filing a "proof of debt". If your claim is rejected, you may bring court action challenging that rejection, but must do so quickly, I think within 21 days.

Thanks very much for the response!

Ok so if I submit a proof of debt form to the liquidators and they reject it, am I able to use the small claims court to challenge their decision? Or is there another process I need to follow?

Also, do you know if the Ombudsman ruling will affect my ability to take them to court? My argument would be that the company has failed to meet their end of the Ombudsman agreement.

[R0b]

To clarify Atticus' point, if the liquidation was a compulsory liquidation i.e. court ordered then there is an automatic stay of proceedings but if liquidation was initiated by the company itself or its creditors, there is no automatic stay of legal proceedings and you are free to start a claim. The insolvency practitioner can still make an application for a stay of proceedings, however.

If you want to enforce an Ombudsman's decision there is a specific process for doing that and if I recall a particular form you have to use.

You can also complaint about the insolvency practitioner and suggest you read the .gov link below though I'm not sure if it would be something they are subject to complying with - worth a shot anyway just to add a little pressure.

How to complain about an insolvency practitioner - GOV.UK (www.gov.uk)

[samusuk82]

If you want to enforce an Ombudsman's decision there is a specific process for doing that and if I recall a particular form you have to use.

The issue is that the Ombudsman have ruled that the company have to provide full details of where the funds where sent and how to allow me the opportunity to claim them back. They haven't specified what should happen if the company fail to do this.

It seems the company is unable to provide this information though. So, I'd like to know if they continue to fail to meet the requirements of the Ombudsman ruling, can I then go back and claim the funds directly from the business instead?

I've already agreed to the Ombudsman agreement and it is legally binding.