Bank orders debt-help firm to stop taking cash from clients
A FIRM that acts for distressed borrowers has been ordered by the Central Bank to stop taking payments from its clients.
Money Village takes money off people in financial trouble and pays it to banks and utility companies on their behalf.
It tries to negotiate some write-offs of debt and better payment terms for its customers, but the Central Bank told it to stop, pointing out that it is not authorised to provide a payment service.
The debt management industry has been dogged by controversy with a number of firms collapsing leaving householders out of pocket, but the bank stressed that clients' funds were not at risk.
Regulators said the priority was to ensure that Dublin-based Money Village contacted its customers to advise them of the current situation.
Customers were also advised to contact their lenders and other creditors to confirm payments have been made on their behalf by Money Village.
The regulators are concerned that Money Village is not abiding by the EU Payment Services Directive, but Money Village was outraged. It said the Central Bank's statement was "very disappointing" and added that there was no legislation for debt management firms here.
It said it had been in "private negotiations" with the Central Bank since 2010 about ensuring there was regulation.
Money Village said it had worked closely with the bank and had co-operated in every way in an effort to reach agreement.
Chief executive Eugene McDarby said that in the absence of regulation it had worked within British guidelines.
"Money Village is fully viable and can meet all its financial obligations as proven to the Central Bank," he said. "Our legal team is now trying to resolve the matter with the Central Bank as swiftly as possible."