TONY HETHERINGTON: Why was my investment windfall from an inheritance seized to pay off my debts?

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Tony Hetherington is Financial Mail on Sunday's ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

Mrs J.N.O. writes: After my husband died and left me with two teenage sons, I got into debt, owing about £14,000. I found a reliable debt management company – Moneyplus – and made arrangements to pay off my debts, eventually entering into an Individual Voluntary Arrangement. 

I reached a point where only about 18 monthly payments were left due, but meanwhile my two sons and I inherited some money which I invested. Half belonged to a son who is mentally ill. 

Solution: Now creditors have been paid – and the IVA closed

When this matured, Moneyplus took all the money without my knowledge and now wants me to set up another arrangement.

This is not a happy situation. I am afraid the copy you sent me of your relative’s will only names you as the beneficiary and you invested all the money in your own name. There is nothing to show any of it ever belonged to your son, even if that is what you intended should eventually happen.

The cash was invested with Legal & General and when it matured the company quite rightly asked Moneyplus what to do with the proceeds.

It was legally obliged to say that the money should be used for the benefit of your creditors. Neither Legal & General nor Moneyplus had any choice in this and neither did anything wrong.

With your consent, I have discussed all this with Manchester-based Moneyplus, which has been helpful. Your debts originally stood at just over £10,000, a bit less than you thought, but Moneyplus got your creditors to agree to accept just over £8,500 which you would pay off at the rate of £142 a month over five years. This saved you around £1,500 and you faced no more interest charges.

Moneyplus was recently told about the Legal & General investment. Boss Chris Davis told me: ‘It is unfair to say we “took” the funds that belonged to Mrs O. It was Legal & General that made us aware of it and therefore we are bound to include the windfall in the arrangement.’

He explained you have not been asked to sign up to any new arrangement. Instead, you have been asked to agree to change the terms of the current one so your creditors can be paid in full and the remaining cash from the windfall can go to you.

Because you mistakenly thought this was a new long-term arrangement, you refused to discuss this with Moneyplus. I have been acting as a middleman, passing messages, questions and answers backwards and forwards.

The effort has been worth it. Moneyplus arranged a meeting of your creditors, who agreed to waive their right to charge any interest. You finally consented to the deal and Moneyplus has now sorted out your debts and paid your creditors.

There is £7,695 remaining. This is yours with nothing more to pay. Your Individual Voluntary Arrangement can be closed and you can move on with no debts hanging over you.

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The boss of a business that lied to investors, claiming they could make profits of 82 per cent by investing in carbon credits, has been banned from acting as a company director for the next 14 years.

Aaron Whiteman, 43, set up Eco Business Management Limited and installed a friend as a front man so he could stay in the shadows. But it was Whiteman who instructed solicitors to draw up contracts and other paperwork that he gave to his sales staff.

Crook: Aaron Whiteman got a 14-year ban

Investors were told to send their money to a bank account in Switzerland and in 12 months the company raked in £241,000 from the sale of worthless carbon credits. Meanwhile, Whiteman ordered false accounts to be prepared, showing the company was dormant, and investors were told that Eco Business Management had gone into liquidation, which was also false.

Two years ago, I reported that the company was part of a network centred around a separate firm, Carbon Neutral Investments Limited. This gave the false impression of providing a two-way market so investors could turn their credit back into cash, but no such market existed.

When investigators from the Insolvency Service questioned Whiteman, he told them he kept no records or bank statements. He claimed he handed control of the company to someone whose name he had forgotten.

After the Insolvency Service produced its evidence, Eco Business Management was closed down by the High Court, with the judge condemning it as a fraud. Whiteman is now running a drinks business in Stockholm. The £241,000 has not been recovered.

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email [email protected]. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.