IPA Volume Provider Regulation Scheme
The IPA strongly believes that the Volume Provider Regulation Scheme, a first in the insolvency profession, will deliver lasting confidence in the personal debt solutions market.
Launched by the IPA, the Volume Provider Regulation (VPR) Scheme came into effect on 1 January 2019.
The VPR Scheme was rolled out in response to the rapid development of the Individual Voluntary Arrangement (IVA) market – the most commonly used debt solution in England, Wales and Northern Ireland. The Scheme provides some of the closest scrutiny seen in financial services.
We implemented the VPR Scheme with the co-operation of the volume IVA providers whom the IPA regulates – the vast majority of firms operating in this space. In line with the Regulatory Guidance the IPA take a risk based approach to definition of ‘Volume’ which reflects not only the number of appointments but considers other risk factors.
- One full visit and up to three to four focused reviews a year
- Regular meetings between the Chief Inspector and each Scheme member
In launching the Scheme, we had input from Insolvency Practitioners (IPs), the Government, debt charities and creditor groups.
In July 2019, the Scheme was extended to cover Scottish Protected Trust Deeds (PTDs) administered at volume (defined as controlling more than 10% of the PTD market; entry level is currently around 3,000 PTDs).
During 2022, the Scheme covered 63% of the IVA market and 75% of the PTD market.
Better Oversight, Better Outcomes, Better Service to People in Debt and the Public Interest
VPR Scheme members are subject to increased monitoring, comprising:
- Continuous monitoring through Monthly Data Returns
- One full visit and up to four focused reviews a year
- Regular call monitoring
- Bespoke investigations into identified areas of concern
- Scheme members providing annual accounts, detail of their corporate structures and other data as required
- Monthly meetings between the Chief Inspector and each Scheme member
- Quarterly meetings between the IPA and the Scheme member group
This gives the IPA more detailed and real-time insight into members’ operations. Therefore:
- The IPA’s inspection visits and reports are more focused
- Regulatory time used is far more efficient
- Key areas and common themes are targeted
- The IPA can address concerns immediately
When key areas and common themes are identified, the IPA can target these on an ongoing basis, in order to raise standards quickly and provide an assured response to concerns in the public domain.
2023 focus areas
Scheme Membership
It is anticipated that membership of the Scheme will continue to grow during 2023 with new members joining as and when they meet the criteria.
SIP3.1/3.3 Advice
SIP 3.1/3.3 advice will continue to be monitored during 2023 as the IPA considers that continuous monitoring is key in this area.
Work Introducers
The IPA will continue its work in the work introducer/lead generator area and will determine what steps to take once the outcome of the FCA consultation is known.
The IPA will continue to further its working relationship with the FCA and other parties in this arena.
Review of Personal Insolvency Landscape
The IPA will continue to take an active role in the Insolvency Service’s review of the personal insolvency landscape.
Anti-Money Laundering
The IPA will continue to review risks in the IVA and PTD markets and ensure that firms have effective policies and procedures in place that are able to both identify current risks and adapt as risks change.
“We were warmly welcomed by the IPA into the Scheme during 2020. We were provided the opportunity to discuss the Scheme requirements and to obtain an understanding at the outset of the practical expectations of the Regulator under the enhanced monitoring regime.”
Scheme member
“Members of the scheme meet regularly with the Inspectors and these forums allow meaningful discussions to take place, providing insights into challenges or the opportunity to express our views on proposed changes to the sector which may impact our processes.”
Scheme members
The Scheme in 2022 in numbers:
Access the 2022 VPR Scheme Benchmark Report here.
If you would like to join the VPR Scheme and enjoy the benefits of membership, please contact us.
What is an IVA?
- A formal agreement for the repayment of personal debt
- It must be set up by an Insolvency Practitioner (IP)
- The IP manages the process from start to finish, including working with the individual’s creditors
- Fees are paid to the IP for their service
- The IP will agree a payment plan with the individual and their creditors
- The payment plan may involve a lump sum, monthly payments or a combination of the two
- An IVA involving monthly payments usually lasts for 5-6 years
- If the individual’s income increases for any reason, creditors will usually be entitled to an increased sum in repayment