Insolvency Service ‘should be tougher’ on dishonest company owners

Posted 12/01/2011

The Insolvency Service has been criticised for not being tough enough on the directors of businesses who are dishonest.

Trade Body R3 said the government has been failing to take action on those who have been accused of misconduct, with the number of company owners disqualified for this reason falling by a quarter over the past eight years.

Indeed, out of 7,000 complaints submitted to the Insolvency Service in 2010, only 1,400 resulted in disqualification.

Steven Law, president of R3, said the government needs to be more stringent in order to protect businesses and the public from becoming victims of the actions of others.

“Not punishing directors who are blameworthy sends out a dangerous message to others,” he added, commenting that the failure to follow cases up is likely to be a result of a lack of resources.

Earlier this week, the KPMG Fraud Barometer showed that the UK fell victim to more fraud cases last year than ever before, costing the public £571 million.