Carl Wright is Cartel's managing director
One of the biggest claims management companies, Cartel Client Review, has been shut down by the Ministry of Justice (MoJ).
The MoJ has been investigating Cartel since February after complaints from customers that they were owed money.
Last week, Cartel's associated firm of solicitors, CCLS, was shut down by the Solicitors Regulation Authority (SRA).
Cartel (CCR) is thought to have taken about £20m from up to 70,000 customers over the past two years.
Cartel, based in Manchester and run by Carl Wright, was one of the biggest firms in the claims management industry which has sprung up in the past few years.
The firm advertised its services widely, inviting people to pay it a fee of £495 for which it would check if their debts, such as on credit cards and other loans, could be legally challenged and written off.
Hundreds of people have been complaining to the authorities, as well as to the BBC and and other media organisations, that after paying their fees they had heard nothing for up to two years.
That was despite the firm's contractual promise to refund the fees in full if it was found on subsequent examination that the customers had no case.
"Enforcement action is taken against businesses which fail to comply with the conduct rules," the MoJ said.
"Removing a business's authorisation is a serious matter which can only be taken after careful consideration of all the evidence and the consequences for clients of such action.
"This means that CCR will no longer be able to carry out any claims management services," it added.
Cartel's legal firm CCLS was shut down by the SRA because of "suspected dishonesty".
Shortly after, Cartel stopped taking on new clients and stopped answering phone calls to its offices.
Its website has been taken down as well.
In an interview with today's Daily Mirror, Carl Wright said his firm had taken about £20m in fees from customers, but said: "The money is not available to be able to be refunded back to the clients."
But he disputed that the clients had lost their money and argued that they had, in fact, received some services from his firm.
The MoJ would not say what would happen to Cartel next, other than to advise people to ask for their money back, or reclaim the fees they had paid to it from their credit card company, if they had paid that way.
"If you are a customer of CCR your agreement with them, as with any provider, is a private contractual matter between yourself and the provider in which MoJ cannot intervene directly because it is not a regulatory matter for which MoJ has responsibility," the MoJ said.
The claims management industry has been highly controversial.
There are still hundreds of such firms registered with the MoJ, despite the fact that the MoJ, SRA and Office of Fair Trading (OFT) have warned them against making implausible claims about the likelihood of getting debts written off.
Some critics have accused the industry of being little more than a scam, luring desperate people to hand over cash with no real chance of their claims against their lenders succeeding.
The main argument put forward by the claims companies has been that loan agreements struck before April 2007 could be challenged in court and cancelled if the lenders were unable to produce a copy of their original agreement, or if the agreement was illegible or did not contain the specific terms required under the Consumer Credit Act.
A few people have succeeded with these arguments, although Cartel always refused to say exactly how many successes it had had.
Lawyers involved in some claims have confirmed that banks and other lenders have sometimes thrown in the towel and cancelled loans when they have realised they could not produce the documents needed to uphold their agreements, or if they knew that the paperwork had been legally faulty in the first place.
However, a series of High Court cases in recent months has dealt a big blow to Cartel and other firms like it.
It has been confirmed that banks and other lenders can "reconstitute" their terms and conditions to show that their original agreement with a borrower had been in line with the law.
Even if a lender is unable to produce a reconstituted "true copy" of their agreement, the loan is still only unenforceable until such time as the copy is eventually produced.
In the meantime, lenders can take other steps to get their money back, for instance by threatening to put a mark against someone's record with a credit reference agency if they do not pay up.
And Carl Wright, CCR, and CCLS were facing a huge bill for legal costs incurred by several High Street banks after losing some of a series of test cases at the High Court in Manchester last December.