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In recent months the number of IVA mis-selling cases coming to light has risen to staggering amounts. Conservative estimates from ethical members of the insolvency profession run to as high as 2 in 10 IVAs having been mis-sold.
In the last 5 years the majority of IVAs sold have at least had elements of mis-selling or poor advice. IVAs were conceived initially to allow insolvent small businessmen to continue trading and were never intended to be sold wholesale to anyone in debt regardless of their circumstances. Around 5 years ago, clever marketers linked up with unscrupulous Insolvency Practitioners and began mass marketing IVAs as an alternative to bankruptcy. They played on the general public’s fear of the word ‘bankruptcy’ and the general ignorance of the actual facts surrounding bankruptcy. This despite the fact that in the overwhelming majority of cases, their ‘clients’ would have been far better served under the protection of a bankruptcy order. It is quite clear that in the vast majority of IVA mis-selling cases, the only true beneficiaries are the IVA ‘factories’ that mis-sold the IVA and the Insolvency Practitioners that they pay to sign off on them. IVAs were intended to be an individually tailored insolvency solution. An ethical Insolvency Practitioner would, in every case, have at least one (or often several) face to face meetings with each and every client, discuss and investigate their case in detail and then examine all the options before deciding which insolvency solution would best suit the client. The IVA factories have completely abused this trust. They mass market with clever but misleading adverts on cable and satellite TV. They rely entirely on commission based tele-sales agents with little or no training or experience in insolvency (other than learning some slick sales patter). In the overwhelming majority of these cases the clients have absolutely no contact at all with an actual Insolvency Practitioner and are offered no alternative to the IVA that they are subsequently mis-sold. People who have no assets or equity to protect are often far better served under a bankruptcy order. The IVA factories know this but prey on the client’s prejudice or fear and ignorance of the fact pertaining to bankruptcy.
Insolvency Practitioners have a duty of care to their clients to offer them the best advice. It is not acceptable simply to ask the client if they wish to go bankrupt and take their answer at face value without clearly and concisely explaining to them exactly what a bankruptcy entails. Failing to do so is mis-selling as the clients are prohibited from making an informed decision. IVA factories know full well that the vast majority of their victims are completely ignorant of bankruptcy and they play on this fear to sell them an IVA as some kind of ‘wonder solution’ that will ‘keep them out of the dreaded bankruptcy’, despite the fact that the bankruptcy option is clearly a far better deal for the client.
UK Bankruptcy Ltd has been leading the charge in the fight against IVA mis-selling and will continue to assist victims of this appalling scandal until such time as this sharp practice is finally stamped out and the IVA factories responsible are shut down.
UK Bankruptcy Ltd is the first and only independent debt adjuster to offer a complete credit builder program that begins in the bankruptcy court and ends ( after a three year financial re-training program), with the debtor being financially rehabilitated and in a position to apply for and receive a mortgage offer.
Simply complete our online questionnaire to enable us to confidentially see what we can do to help.
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