The director of a used-car dealership in Kilmarnock has been disqualified for seven years for breaching consumer protection legislation, causing a loss to customers of some £95,000
The second-hand car dealership, Marshalls of Kilmarnock, with liabilities of £544,309 was placed into liquidation following a winding up petition from HMRC. Kevin McMonagle was the sole director of the company.
An Insolvency Service investigation found that from 4 June 2014, Trading Standards received 36 complaints from customers which resulted in losses to 17 customers of about £95,000.
The complaints related to not paying or refunding money owed to customers; selling cars which were not of satisfactory quality; omitting to transfer vehicles registration documents; and failing to pay off finance agreements of customers trading in their vehicles.
Trading Standards met with McMonagle regarding these complaints on 4 December 2014, and following further complaints it applied to the Court for an enforcement order after McMonagle stopped co-operating during March 2015.
On 15 April 2015, Kilmarnock Sheriff Court issued an interim enforcement order to stop breaches and protect customers.
McMonagle surrendered his licence to sell second-hand cars on 28 April 2015 which cause the company to stop trading.
The undertaking he has given to the Secretary of state for Business, Energy and Industrial Strategy (BEIS) means he is unable to be the director of a company for seven years from 26 June 2017.
Robert Clarke, head of company investigation at the Insolvency Service said: ‘When directors of a company do not comply with legislation that is designed to protect customers, and avoidable losses result, the Insolvency Service will fully investigate the circumstances and take action where appropriate.
‘In this case, a significant number of customers have been left out of pocket thanks to Mr McMonagle’s disregard of protective legislation and it is appropriate that their disqualification is for a significant period of time.’
HMRC background note:
Most businesses pay their taxes, but when a business goes under, the public purse may be left with large irrecoverable tax debts. HMRC, like any other creditor, has a duty to work with insolvency practitioners to work out whether the directors acted correctly at all times.
From 6 April 2012, HMRC can require employers to pay a security where there is serious risk, based on past behaviour that they will not pay their PAYE or Class 1 NICs.
