www.iva.co.uk

I have not paid a great deal of attention lately to all the talk of "mis-selling" of IVAs as I am happy that - with my own IVA - the various parties I have had dealings with have acted in a totally professional and "upfront" manner. Options were made clear to me and fees were clearly set out - and in any event - I also did my own additional research into IVAs before going down this road. One year in and I have no complaints.

What exactly is the basis of the mis-selling claims? From what I have read it seems that some people were advised to take out IVAs when Bankruptcy may have been viewed as more appropriate (as in less onerous in terms of repayments to Creditors) and "cheaper" in terms of fees / costs.

The way I see it - no-one is forced against their will to sign up to an IVA - or any of the alternatives - they do so by choosing one in preference to the other options. Many people make the point that whilst bankruptcy may be "over" quicker they value the chance to repay the maximum they can to Creditors in a reasonable time scaale. With so many excellent sources of reference and advice available - not least this forum - it is easy to do your own additional research to make absolutely sure that you have chosen the most applicable solution for your individual circumstances. Obviously a number of IVAs will subsequently fail or hit a rocky patch for a myriad of reasons such as unexpected changes in circumstances.

I have read with interest the new developments on the IVA Council website and am just honestly trying to grasp the basis of what exactly constitutes alleged "mis-selling" - is it purely the IVA / Bankruptcy thing?

Like I have posted before I am with a large volume IVA provider and cant fault any of the process so far.

i belive their is no such thing as mis selling an iva, if you look at people who claim this, its because if they get people to belive this they can get money out of it

I'm not sure there's much doubt that some mis-selling of IVA's (or debt management, or mortgages, or any other kind of financial product) has taken place.

Companies, especially those that must report to their shareholders, have a built-in incentive to over-sell the product they happen to offer, or the product which happens to produce the most profit.

There are a couple of potential control mechanisms:

1 - Ownership: Where the reputation of those that own a business hangs on the standards of advice they deliver there must be a much stronger drive to do the right thing (sometimes at the expense of short-term profit).

2 - Regulation: Which in the debt industry is fragmented. The right to provide debt advice is granted by the OFT, the duties of being an IP are overseen by their professional bodies, financial advisors are regulated by the FSA, and debt management again falls under the auspices of the OFT.

I believe that most people get best advice most of the time within the industry as it stands. Cold-comfort for those that do not at a time that they may be vulnerable.

My biggest fear is that it's way too easy for an individual/firm to set up as a "professional debt advisor" without knowing what they're doing. Even if they're genuine the damage can be awful if they haven't got the knowledge required to provide the right advice.

If you do not have assets to protect like a car or house and you do not feel a compulsion to pay back as much as possible then you should not be offered an IVA and encouraged to take one out. I know that at the end of the day you are the one who signs up to it but when you are under pressure to get something sorted out many companies will prey on this and make money out of you, thus mis-selling.

Can't agree I'm afraid. Nobody will ever force you to sign up to an IVA, indeed the time it takes to set up an IVA from initial enquiry to creditors meeting should give everybody and anybody a large cooling off period. You will also be sent an R3 booklet which clearly lists bankruptcy as an alternative and you have to sign that you have read it and return to your IVA provider.
I cannot see how anyone could describe that as pressure.

Nobody forces you to sign up for a credit card either but a lot of people do as the selling tactics of credit card companies are very convincing

I agree with that point, but in general those organisations that shout the loudest about so called mis-selling are the ones that stand to make most money from it.

I would like to take issue with Welshman - I think in a way that he is implying that people going down the "IVA road" are easily lead astray. Well - it is true that for whatever reason many people have ended up insolvent through selfish reasons (no stupid excuses please - accept the blame - directed to me personally as well!!!!!) - but we must all accept that we are responsible for our own actions.

We have GOT to get out of this "blame" culture where we say that our Creditors are to blame for our problems - we are adults aged 18 plus and are fully legally and morally aware to make our OWN decisions. Noone made us apply for Credit Cards and noone made us accept them - but for whatever reason we did so.

There is no doubt that certain Creditors are basically stupid for throwing increased Credit at people when it should be obvious that this is wildly inappropriate - but if we (debtors) accept this then there is no doubt that we are complicit in what is going on.

For goodness sake - we (debtors) are responsible for where we are. From reading the forum some people seem to get - quite honestly - fairly generous allowances for contingency and other allowances in their IVAs. Speaking personally - my allowances for the month are small but manageable - they are less than many posters. But I stick to them - I have now made 12 monthly payments and am b***** determined that I am going to see things through.

Please - if you are embarking on an IVA - be honest from the start. Things will be tough - but they SHOULD be tough - your Creditors are potentially writing off thousands and thousands of pounds. Be THANKFUL for that and be honest abouut your I + E - your Creditors are doing you an unbelievable favour - please reciprocate with honesty.

Hi
Everyone must take responsibility for their situation,agreed.
However knowledge of the insolvency industry by the average Joe Public is very limited therefore they rely on the most appropriate debt solution to be offered to them in the FIRST instance.So if that advice was DMP then the vast majority of people are going to take that route,if the advice was IVA then most people will take that advice.However many people advised on bankruptcy will not take that route because of the stigma and miss information that they already have regarding this subject.
The right advice is down to the debt solution provider,full stop,if that advice has been documented and the debtor chooses another then the responsibility is on the debtor and no comeback of miss selling can be made.
Regards

Hello Andy -

Your post makes good sense but I must take a small issue. I am most definiteley a person of just average brain / intelligence power but I realised from the start that many people I approached would have a degree of financial "self-interest" with regards to their helping me out. I KNEW that and tried to bear this in mind when deciding what to do.

I had zero knowledge of the insolvency industry but got stuck into the internet. CCCS gave me great advice (wish SO much they would post on the forum!!!!) and my IVA Provider have been brilliant. Over and above all this I have used my own brain to decide what to do.

Speaking from personal experience - CCCS set me on the right road 100% regarding my range of options - and my IVA provider (I have decided never to name them as I can only speak for myself) - have been brilliant.

I agree that some people may be wrongly influenced by professional advisors - but this forum can be so influential in saying - THINK - DOES THAT PERSON HAVE YOUR BEST INTERESTS AT HEART?

BUT - in fairness - my "high volume" IVA provider has been brilliant and - from what I have read - they have been pro-active in seeking to help regulate the whole IVA industry.

So -please do not assume that big equals bad. I will be honest and say that it would be great to have my I.P. at the end of the phone - and sometimes I feel jealous of Forum members who have that facility - but my experience so far ( 4 years to go) has been more than OK. I think my IVA company is jolly good!!!

I agree with you Andy.

Optimist, I have to disagree with some of your points. I also think that I'm a reasonably intelligent individual, but I was desperate and took the advice of the first company I spoke to. To you that probably makes me stupid. They basically told me I didn't want to go bankrupt and in my desperation I listened. I also took the advice of the large company my file was passed to and when they told me it didn't matter if my allowances weren't correct providing the figures added up I didn't question them. I was desperate and presumed that they had to offer me the best advice.

No one forced me to take credit, but on the other hand why did the banks keep increasing my credit limit? Why did Egg agree to give me a £16k consolidation loan when I already had a £25k loan with Natwest. Towards the end the only reason I was taking credit was to survive.

Yes, an IVA should be tough, but not so tough that people have no quality of life, which was the situation I found myself in. I decided to go BR when I realised I couldn't afford flowers for my uncle's funeral if I was going to put the petrol in my car to go. That's not having a fresh start, that's making life even more unbearable.

Maybe we all need to think back to how desperate we were, and not judge people because they make a wrong decision.

Hi Skippy -

With respect I am going to stand by what I have said.

In a million years I would never describe you as "stupid" as I have learnt so much from your posts about bankruptcy and am fully aware that if my IVA goes wrong in the next 4 years I will need to make use of that knowledge.

I would say that I was maybe a bit more circumspect in what I looked into before deciding to sign up - I was scared to trust anyone to be honest!!! - but I think the whole situation re IVAs had changed somewhat between your initial investigations and my own.

Regarding crazy credit - I agree with you - ever increasing credit limits from creditors are just plain stupid - why do they do it (interest of course) - and I was as guilty as the next man / lady in accepting this.

I DO still think that life in an IVA should be tough and have been surprised by some of the posts on the Forum recently (generous!!) re I + E. But regarding your mention re flowers for a funeral I think any system that cant make exceptions for that is patently complete nonsense. I have not had a family bereavement for a couple of years now but can recall how this puts all else into perspective.

Believe me - I did go through desperate times before embarking on my IVA. It has changed my life in many ways and I will be forever grateful to my Creditors for approving it. I would never criticise anyone for past mistakes but maintain that everyone should do all they can to put those mistakes right. And I would include myself 100% in that.

I can only say at this point that MY golden rule is that I advise people to do what I would do personally should I find myself in that situation.
If that is BR, IVA, PTD, DMP, REMO or whatever then so be it. I cannot and will not force anyone to take my advice.
The individual(s) concerned DO have to take responsibility for their actions, and I also would say that IVA's are sometimes advertised as a miracle cure when clearly they are not, they are designed to get as much back for people that advanced credit in good faith in the first place, albeit irresponsibly in many cases.
Not sure re flowers for a funeral, your attendance at said funeral would surely count more than a bunch of daffs, it is NOT fair to expect your creditors to suffer.

Sorry Optimist, I didn't get a chance to reply to your post last night. It's good that we can have healthy disagreements on the forum!

I agree that an IVA should be tough, but not unbearable. I knew after 4 months that mine was going to be unbearable - I had £200 a month less than it appeared that I would (my fault for misunderstanding the figures I know) and I had no contingency. The figures bore no relation to what I actually paid out (which I pointed out but was told not to worry), and I was trying to do the food shopping for 2 of us on £100 a month so my partner was giving me back my rent money each month so that we could eat! The funeral was the final straw, and I appreciate that my creditors shouldn't suffer, but why should I not be able to send flowers for someone who was like a father to me? To be honest it wasn't so much that I couldn't send flowers, more that it made me realise that I was going to have no quality of life for the next 5 years.

I did ask if it would be possible to have a variation meeting, and I would have extended my IVA by another year but I had the 'no variations in the first 24 months' modification so was told there was nothing I could do apart from pay the IVA for 24 months and then ask for a variation or go BR there and then. Although I didn't really want to go BR I felt I had no other option.

Skippy -

Thank you for that message - I agree with you - there is nothing wrong with a healthy disagreement!

I think one good thing about the rapid increase in IVAs (and the other options mentioned by size5) is that they are now much more "known about" by people and there is now available a gradually increasing availability of useful advice and information from which people can learn before committing themselves.

It is a shame but I guess there will always be instances where things dont go to plan - or where people get the wrong advice for whatever reason. And at least forewarned is forearmed - if my IVA does fail somewhere down the line I now know exactly what Bankruptcy will entail and that - more importantly - it will not be the end of the world. (Until I started initially investigating IVAs etc I used to think that Bankruptcy meant that you could be made to pay ALL your spare money over for up to 15 years!!!).

Oh - AND I dont know what a "PTD" is (mentioned above by size5!!!!).