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Court shuts down Century mortgage accelerator firm

Mortgage broker Century Mortgages and its associate Mortgage Control

Services are to be wound up for misleading their clients and the sales


The Department of Trade and Industry petitioned the High Court to close

the companies down on the advice of the Secretary of State for Trade and

Industry who found the companies had not warned clients about the

disadvantages of the “fundamentally flawed” mortgage acceleration programme

it promoted.

The Secretary of State had several misgivings aboutthe acceleration

programme under which participants were induced to enter into deals to

speed up the payment oftheir mortgages.

The misgivings included the fact that a repayment mortgage was

considerably less costly, the programme was inappropriate for endowment

mortgages, early redemption of the loan was more expensive and advice was

limited to a small panel of lenders.

Century was also accu-sed of misleading its self-employed agents, or

licensees, about the earnings that they would receive, failedto train them

properly, and strong-armed them intobuying shares.

Yorkshire-based Century Mortgages started trading as a broker in September

1995 offering remortgage packages through a network of 3,000 licensees.

Mortgage Control Services were responsible for administering mortgage

payment schemes on behalfof Century.

Recruitment advertisements for the licensees indicated that they would

earn between £25,000 and £50,000 a year but hardly anyone did.

The businesses failed to keep proper records, in particular regarding its dealings with associated businesses.

The DTI investigations were conducted under the provisions of Section 447

of the Companies Act 1885. The companies will now be liquidated by the

official receiver.

The company directors initially opposed the moves to close them down but

dropped their opposition.


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