IPA Urges Caution: Seek Regulated Debt Advice, Avoid Social Media!

London, 25 July 2023

IPA Head of Regulation, Lyn Green: “In light of recent concerns raised by BBC Panorama, the Insolvency Practitioners Association (IPA) emphasises the importance of individuals seeking debt advice to use reputable sources and advises against relying solely on social media platforms. The IPA is committed to ensuring that those struggling with debt receive fully regulated professional and tailored guidance, and to address the lack of understanding surrounding the benefits of the Individual Voluntary Arrangement (IVA) process in terms of debt settlement, costs, and duration.

Collaborating closely with the Financial Conduct Authority (FCA), Advertising Standards Authority, and the Insolvency Service, the IPA conducts comprehensive monitoring, inspections, and enforcement activities to safeguard consumers seeking debt advice. However, it is crucial for individuals to be cautious about the sources they consult when dealing with financial matters.

For those already enrolled in an IVA and maybe facing cost of living pressures, the IPA strongly recommends that they first speak to their appointed supervisor. The supervisor possesses the necessary expertise and insight into their specific situation, enabling them to provide the most appropriate guidance.

The highlighted concerns also underscore the need for the IPA to have regulatory powers over firms, in addition to individual insolvency practitioners. These expanded powers would enable us to oversee and regulate entities that guide people through the insolvency process, ensuring better protection for individuals in debt. We are pleased that the Government is actively considering this issue and engaging in consultation.

To further strengthen the current oversight, the IPA has taken proactive steps to enhance the quality of advice provided by the largest IVA advice providers. This includes issuing comprehensive guidelines on advertising practices and actively monitoring calls to ensure consumers receive accurate and reliable guidance. Where necessary, enforcement actions will be taken to maintain the integrity of the debt advice process.

In line with our commitment to impartial regulated advice, we welcome the FCA’s recent ban on referral fees. This decision is expected to encourage more individuals in debt to seek unbiased and reliable support. The programme highlighted the importance of all stakeholders working collectively to monitor and report the unregulated entities that pose a significant risk to those seeking debt help.

The Insolvency Service and FCA websites offer valuable tools to help individuals find regulated support, ensuring they receive accurate and dependable advice during challenging financial times.”