In January 2007 The Office of Fair Trading (OFT) – a government body which looks after consumer interests – issued an official warning to a number of IVA Companies about the claims made by some of their advertising in both the press and on the internet. The OFT conducted a study of IVA Advertising in November 2006 and analysed 124 Newspaper advertisements and 57 websites offering IVAs. As a result of the OFT investigation 17 companies were given four weeks to change their advertising claims to stop any question of misleading the public, or face sanction.
An IVA is one way in which consumers with overwhelming debt problems can get their unsecured debts restructured. In 2006 more than 44,000 consumers entered into IVAs. In many cases a successfully completed IVA will result in creditors agreeing to write off approximately 60% of the original debt. However some of the advertising claims "write off 90% of your debts" which is virtually impossible in an IVA. The OFT also found that some of the advertising appeared to guarantee that an IVA would be approved when it is the creditors who decide whether to approve an IVA.
There are now more than 500 different companies offering access to IVAs and it is very confusing for consumers to know who to talk to and who to trust. The following guidelines are useful-:
With the huge growth in IVA companies and debt advertising, more legislation and formal guidelines to control this market is inevitable. Insolvency Practitioners themselves are highly regulated through their own Regulatory Authorities such as The Law Society or Institutes of Chartered Accountants, however there are many debt management companies and other introducers out there which are less so. The major IVA companies are trying to put together some self regulation guidelines but it is likely that both creditors and consumer groups are going to want something more independent and visibly robust.
Answer a few simple questions and we'll help you find your solution.
Total unsecured debt : £4000