Adrian Whitehurst, a director of the company from 2 October 2007 to 27 July 2009 and Christine Whitehurst, who succeeded him from 24 July 2009 to 18 October 2013, have been disqualified for 10 and 14 years respectively.

The company traded from Stockport and operated under the regulation of a consumer credit licence preventing utilisation by the company or its directors of funds held and providing protection from any failure of the company.

The Insolvency Service says First Step represented to its clients that it was complying with these requirements when in fact it was not and the directors drew significant sums from the client accounts. At the date of Christine Whitehurst’s resignation there was deficiency of client funds of £5,943,939.

Following her resignation the former finance manager Darren Newton acquired the company and became its sole director. He has given a disqualification undertaking for three and a half years for allowing First Step to utilise company funds, totalling £302,500, and enter into transactions to purchase First Step’s shares for the benefit of another company of which he was a director, at a time he was aware of the deficiency on the client account and was unable to pay these sums himself.

The Insolvency Service said the Whitehursts withdrew money from the company in breach of the regulations and treated it as directors’ drawings. They then set off their liability for the amounts they owed the company by selling their shares in both a speculative overseas property development and the company itself at prices that could not be explained and to their own advantage.

In addition, funds taken from client accounts were loaned to companies owned and controlled by family members but which had limited trading histories and minimal assets and resulting in the sum of £678,816 outstanding and unrecoverable from these companies when First Step went into administration, in May 2014. At that point the company had assets that realised £236,332 and liabilities of £7,354,030.

Robert Clarke, investigations group leader at the Insolvency Service said: ‘Customers who are forced to use debt management companies are particularly vulnerable individuals which is why the sector is subject to stringent regulation.

‘The actions of Mr and Mrs Whitehurst in deliberately misrepresenting the basis on which funds were held and then taking these monies to fund their lavish lifestyle are reprehensible and therefore disqualifications towards the top period allowed by law are entirely appropriate.’