[Paymex] Was Paymex Trading insolvent?

[Globespec]

Hi Guys

I am not to up with the play with all the legal ramifications, but one of my customers who has been effected has suggested 

"Paymex continued taking money (trading insolvent - which means you can take legal action against them if they have folded as trading insolvent is illegal)."

Any thoughts??

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Comments: Hi 

One of the merchants who also deals with paymex talked to liquidators and they had said that the business model paymex has used was a bit dodgy cause these systems are meant to be setup as trust accounts with firewalls for money etc. 

Instead what happened was it wasn\'t and all the merchants (yourself) money goes into one account that you guys draw on.

So all money in, and out just sits in one unsecured account.
Then what happened was that a paymex merchant defrauded someone for about 100 thousand dollars or something and Visa took the money back from paymex, but paymex was unable to recover from merchant.
Thus putting them in debt. 

Paymex continued taking money (trading insolvent - which means you can take legal action against them if they have folded as trading insolvent is illegal).

So essentially the whole reason for problem is that paymex has a poor unprotected business model and all the merchants have been stung by this, as when things went sour the money is all sitting there and although there is 35,000 in the bank account, they owe 50000 to merchants.

I believe that paymex\'s reputation will be so shot after this that anyone trading under there name will not be likely to be able to get off the ground again (if this indeed was their business model).

True systems like this are meant to be in escrue (spelling ? not sure) accounts or something which are firewalled against visa taking other peoples money back etc, and so that the company cannot touch it.

Instead this company sounds like they have set it up just as a normal bank account with BNZ.