The Insolvency Practitioners Association (IPA), the UK’s largest and most recognised insolvency regulator, has introduced first-time measures to regulate a new and dynamic area of the insolvency market.
The first benchmark report of its new scheme which launched in January 2019, has been produced.
The IPA's Volume provider regulation scheme acts to regulate Insolvency Practitioners who operate large volumes of personal insolvency cases.
It was made in response to the Insolvency Service's call for more stringent monitoring of the Volume IVA (and soon to follow PTD) providers. The scheme is voluntary but all volume providers who are IPA monitored are encouraged to take part.
The key features of the scheme are as follows:
- Continous monitoring through monthly data
- One full visit and up to four focussed reviews a year
- Quarterly 'advice' call monitoring
- Bespoke investigations into areas of concern
- Annual accounts to be provided of volume IVA providers
- Regularly held meetings with the volume IVA providers to discuss any trends and issues
When people find themselves hit by financial debt, Individual Voluntary Arrangements (IVA, UK) and Protected Trust Deeds (PTD, Scotland) are turned to, in hope of debts being managed. It has been found that the number of these solutions used in the market has grown a rapid 1250 per cent since 2010, to reach over 270,000 cases by the end of 2019. As the number of cases rose, the number of firms who administer such solutions has risen to match. the result of this being that the market is now controlled mainly by a handful of companies that administer cases at much higher volumes than ever seen before in the profession.
The IPA have never seen this before hence now they move to a continuous regime of monitoring these firms. Each and every piece of information is made easily accessible and the number of face to face and remote monitoring visits has increased – moving away from periodic reviews. It is thought that by doing this, confidence will be instilled in this area of the market.
For this to be a success, those who enter such debt solutions must understand the rules they sign up to as well as the consequences of defaulting on the agreement. There is doubt over how sufficient the advice is when given to prospective clients, hence the new scheme requires the IPA to investigate 305 in-depth advice call reviews.
In another industry first, the IPA have launched a new requirement that the Financial Conduct Authority must authorise all lead generation firms supplying the providers with business. This follows volume provider marketing and advertising being brought under strict scrutiny by the association.
The IPA have made these regulation changes to ensure that volume providers are clear on their responsibilities and cannot fail to adhere to the rules. All services to people in debt must always be to the high professional standards expected.
CEO of the Insolvency Practitioners Association, Michelle Thorp explained how the new changes are to help provide assurance to those in debt that they can trust the services they are working with, encouraging a more confident environment.
‘’I was pleased by the swift rate at which the volume provider regulation scheme was adopted. We will adapt the scheme over time to ensure that we are keeping in line with this fast-moving part of the profession. Many thanks to the Insolvency Practitioners, volume providers and those from the creditor community who were instrumental in helping us to design and implement the scheme.’’
You can find the benchmark report on the IPA website.