In 2014 the FCA introduced new regulations over the debt management sector. As an IVA specialist with over 10 years’ experience I was starting to see more and more people receiving very poor standards of debt advice. Many were entering into inappropriate IVAs (which they were likely to fail) when there were better solutions available, but these weren’t explained to them properly.
The new regulations meant that commercial marketing companies switched their attention from mainstream debt to the more lucrative IVA market instead. They’d often pay a large amount for those leads (hence why you’d see adverts everywhere) and would highly incentivise staff to convert these leads into IVAs when there may have been a better option.
If an IVA isn’t the right solution for a customer, whether they can’t meet their repayments or they didn’t want to be in it anyway, it’s likely they’ll fail.
A new approach was needed
To help address this and provide better protection for clients we decided to create an organisation where we focused on the outcome for clients, rather than the income we’d get from an IVA.
At IVA.org we try to ensure that every IVA we put forward is the most appropriate solution for that client, we do this by focussing on what’s in the client’s best interests rather than what’s in the financial interests of IVAorg CIC.
Our team take as much time as they need to talk to you about your current debt, lifestyle and, most importantly, what you want to happen.
We don’t rely on other organisations to supply us leads, nor do we pressurise any of our staff to convert IVAs. It’s up to our clients to decide on their preferred solution – our role is to provide them with the information they need to make an informed decision.
To further strengthen this we introduced our unique pledge: ‘
should your IVA fail to complete successfully through no fault of your own, we pledge that the fees you have paid will be used to reduce your debt to the maximum effect, guaranteeing to leave you no worse off.
The current landscape
Unfortunately, our industry is still plagued by debt companies focused on profit rather than helping. We see hugely exaggerated claims about the benefits of entering an IVA, and there are several dominant companies with huge budgets sucking in customers with their conveyor belt style IVA system.
There are also some really creative messages from organisations out there claiming to be ‘government backed’ or other wild statements. Again, this is hugely misleading for customers and we’re often told before they’ve had a chance to take a breath they’re being asked to sign various agreements and paperwork.
Last year there were 88,000 IVAs issued, and 16 companies controlled 90% of these in the UK. Despite the high profits these organisations make their under-resourced teams maintain poor communication with clients and we receive calls daily from people not knowing who their IVA provider is, or how to contact them.
Over the last five years, the combination of bad advice and lack of resources has meant that 1 in 3 IVAs will fail. If this happens, you’ll still have your debt AND you’ve paid thousands in IVA fees as well.
Thanks to our ethos backed by our pledge we’re proud that our failure rate sits at 1%.
Debt isn’t going away
Unfortunately debt isn’t going anywhere, and whilst we can’t reduce bills or directly help with the cost of living crisis, we can continue to live by our ethos of helping you take control of your debt AND make well informed choices. Whether that’s with iva.org or someone else.
At the moment we’re still seeing a lot of people dealing with the financial fallout from Covid, as well as sole traders and entrepreneurs being particularly affected as they try and get their trading back to pre pandemic levels.
Surges in energy costs, as well as increases in food and utility bills have become the tipping point for many.
As someone who spends their days (and years) advising people from all walks of life on their finances there’s one clear simple piece of advice I’d give to anyone.
Pick up the phone and ask for help.
A problem shared is a problem halved and believe me, there’s always a solution.
Ignoring a debt problem in the hope it will just go away is the worst thing that you can do because debt tends to grow when it’s ignored, and creditors can get frustrated when communications break down.
The best place to seek impartial support and advice is from a Not-for-Profit organisation like IVAorg CIC.
We have the tools and experience to carefully evaluate your options and help you determine what actions you can take to regain control over your debts.
So, if you’re worrying over a debt problem, our team are waiting to talk to you, either through our online chat or our dedicated phone line, available evenings and weekends.
0800 856 8569