Entrepreneur Ivan Massow's controversial trail rebate firm has gone out of business because "it made a loss every time" it paid commission back to a customer.
Massow's Commission Cleanser, or Paymemy.com, was set up in September 2011 with the claim that it could help advisers' clients reduce the future trail commission they are due to pay for advice that they will not receive.
By switching their policies to Paymemy.com, Massow (pictured) pledged to rebate 80% of future commissions to customers, while keeping the rest.
The model was "no-win, no-fee", so if Paymemy.com was unable to track down the commission, the customer would not pay a penny.
However as of yesterday the firm is no longer offering a commission recovery service to clients.
The decision to close was due to "the escalating costs of Financial Conduct Authority (FCA) regulatory fees, levies and the costs of professional indemnity insurance", the firm said.
"In brief this means we now make a loss every time we pay commission back to a customer because the FCA class it as regulated income received by us, rather than unregulated income rebated to the customer which it actually is," said the firm.
Existing customers were due to receive full instructions on what to do next, in writing via email yesterday. This information will be resent plus any further updates every few days over the next two weeks, to ensure all customers are contacted and fully informed.
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