Insolvency Service probes concerns around potential mis-selling of IVAs
The Insolvency Service has commissioned research into the take-up of individual voluntary arrangements.
Your support helps us to tell the story
This election is still a dead heat, according to most polls. In a fight with such wafer-thin margins, we need reporters on the ground talking to the people Trump and Harris are courting. Your support allows us to keep sending journalists to the story.
The Independent is trusted by 27 million Americans from across the entire political spectrum every month. Unlike many other quality news outlets, we choose not to lock you out of our reporting and analysis with paywalls. But quality journalism must still be paid for.
Help us keep bring these critical stories to light. Your support makes all the difference.
The Insolvency Service is looking into concerns around the potential mis-selling of IVAs (individual voluntary arrangements).
The service said it wants to understand the experience of some consumers when taking out an IVA.
IVAs are a formal type of personal insolvency, whereby money is shared out between creditors.
Charities have previously raised concerns that some people may be pushed towards debt solutions that are not right for their individual needs.
Specific issues and concerns have been raised which can have negative impacts for those who are most vulnerable
The Insolvency Service said on its website: “IVAs support a valid, public policy objective by providing debt relief for individuals in financial distress.
“However, specific issues and concerns have been raised which can have negative impacts for those who are most vulnerable.”
RSM UK Creditor Solutions LLP has been commissioned to undertake research.
This will seek to establish whether there is identifiable poor quality take-on, or “mis-selling”, across the IVA market as well as its prevalence and form, the service said.
The research will be used by the service to consider whether there is a need to make changes to the regulatory framework.
Information about the research placed on the gov.uk website said: “It should be noted there isn’t an agreed definition of what ‘mis-selling’ is; and others dispute that this is a relevant phrase in this context.
“Nevertheless, we are using the proxy term ‘mis-selling’ in this context to describe a set of poor quality take-on practices.
Matthew Upton, acting executive director of policy and advocacy at Citizens Advice, said in July 2023: “People seeking debt help should be able to trust the advice they get.
“Instead, they are being bombarded with adverts promising quick-fix solutions and huge debt write-offs.
“The reality is that these tactics are deceptive and lure people into fee-paying debt solutions like IVAs, which they so often can’t afford.”