The IPA Volume Provider Regulation (VPR) Scheme 2020 benchmark report is out now – click here.

Michelle Thorp, CEO

Hello all. As the country begins to open up again, I hope that all is well in your work and you are enjoying the reinstatement of old freedoms!

Readers of R3’s magazine, Recovery, may have seen that I was interviewed for the recently-published spring magazine by R3 President, Colin Haig. I thank Colin for putting myself and the IPA under the spotlight and giving me the opportunity to talk about our work.

With the breathing space moratorium due to come in soon, as well as the various new Statements of Insolvency Practice (SIPs) and the embedding of the new public interest test enacted in the new Code of Ethics, now is the perfect time to consider whether any insolvency training would benefit your practice. In anticipation of demand, the IPA has incorporated these topics and more into our new IPA Learning training, delivered in partnership with Insolvency Support Services.

On that note, if there are any future topics that you would like covered by IPA Learning, do drop us a line on [email protected]. Read more about the current planned IPA Learning workshops here.

I hope that readers will join us for this year’s Annual Conference on 28th April. With so much activity in insolvency at the moment, showing no sign of abating, this year’s conference, covering everything  practitioners should know about in 2021, is not to be missed. Read more in this month’s events update, here.

Volume Provider Regulation Scheme benchmark report

In January 2019, we implemented the IPA’s Volume Provider Regulation (VPR) Scheme. The Scheme provides increased regulation and guidance to our members who provide Individual Voluntary Arrangements (IVAs) and Protected Trust Deeds (PTDs) at large volumes. When we implemented the Scheme, we were pleased with the immediate impact on this relatively new sector of insolvency that the Scheme had. We recognised the need for time to see meaningful and lasting change produced, and we are now seeing the Scheme delivering in this way.

Through the VPR Scheme, we have continuous access to firm data to enhance transparency and enable the IPA to identify any problem areas and target our work accordingly.

As a general commentary on the IPA’s VPR activity, we have stepped up our work to monitor advice given on personal insolvency solutions, with a target of reviewing calls in 1% of all new cases registered this year – total new IVA cases last year was 78,478, so that gives you an idea of the scale.

Equally, with Insolvency Service statistics showing that the proportion of IVAs failing in their first year rose to 8.4% in 2019, we have brought rates of IVA/PTD failure under attention and have given our findings in this year’s benchmark report. Our findings include that arrears, changes in circumstances and consumer request were the main reasons for failure. To understand this issue in further detail, we are commissioning an academic study of what makes personal debt solutions fail. I look forward to the results, which I’m sure will be of interest to all those operating in the personal insolvency space. On that note, we have recently welcomed new providers to the Scheme – those who may not be classed as volume providers but nonetheless are prominent in personal insolvency. With this in mind, we welcome enquiries from those who feel they may benefit from Scheme membership. Email [email protected] for more information.

Linked to the VPR Scheme is the Government’s recent consultation on its plans to increase the monetary limits and eligibility criteria of Debt Relief Orders (DROs). We knew that members may be concerned over this move, which, in the form it was consulted on, would likely not have achieved the desired effect. We did seek members’ views in responding to the consultation. Alongside this, the VPR Scheme informed the IPA’s response in a much more substantive way than if the Scheme didn’t exist, due to our increased monitoring work and monthly data returns submitted by Scheme members. In responding to the Government, we advised that its proposal would likely lead to a significant drop in IVA numbers, as more people become eligible for DROs, and dramatic creditor losses. We keenly anticipate the progress of the consultation.

Insolvency marketing is an area that many will know the IPA is actively addressing through our work with members, the FCA, Advertising Standards Authority (ASA) and the Insolvency Service. Any introducer, or lead generator, firm that is employed by a member should be FCA regulated. The reason why we have taken this step is to respond to some evidential unscrupulous introducer activity, not compliant with how insolvency advice and solutions should work for the consumer. This has sadly included some scam activity that is passed off as debt advice.

I’m sure that, along with the IPA, members will be alarmed at such activity and the potential it has to harm the profession. I thank the VPR members for their good work in implementing our new, important requirements for lead generation.

To finish this month, I was pleased to take part in the Step Forward to End Homelessness challenge for Crisis, our Charity of the Year. I was seriously impressed by the team’s efforts – read more in Kevin’s article this month.

Michelle