E-Clear, the credit card processing company, has been put into administration after failing to prove that it has enough funds to pay its debts to Globespan, the collapsed Scottish airline.
A high court order approved the administration after the company failed "to submit evidence of funds", according to PricewaterhouseCoopers, Globespan's administrators.
PwC claimed that the payment firm had received £35m from Globespan customers that had not been passed on to the airline. "Over the last month we have sought financial reassurance from E-Clear and are disappointed that the funds are no longer there," said PwC partner Bruce Cartwright.
Of the £35m total PwC claims, about £12.5m is in fact due to be returned, as the money relates to flights that did not take place. As many as 50,000 customers paid for flights by credit card or Visa debit and are owed rebates by their credit card company, PWC said.
E-Clear is also being pursued in two legal disputes linked to alleged overdue payments owed to collapsed Slovakian airline SkyEurope and Canadian travel firm Go Travel Direct. E-Clear contests all the allegations.
E-Clear specialised in providing payment processing services to smaller firms that were considered too great a risk by other credit card processors. The travel industry is considered among the highest risk sectors for payment firms because it involves large lumps of money often received long in advance of the flight or holiday date.
E-Clear is owned by a parent group in Cyprus, and moved its head office to a Mayfair address four years ago. Its chief executive, Elias Elia, a Greek Cypriot, has been involved in the travel industry for years.
Elia was also the controlling shareholder in Allbury Travel Group, a Hertfordshire travel agent, until it collapsed leaving 100 holidaymakers to be repatriated by the Civil Aviation Authority last month. The travel agency used E-Clear as a payment processor.