Michelle Thorp, CEO

Other articles (Insolvency Practitioner, September 2020):

Hello everyone and welcome to September’s newsletter.

With summer at a close, and with it having been a rather ‘different’ summer at that, I am pleased that I can look back on a fantastic fundraising campaign that myself and others from the IPA were involved in at the end of July. It was a bit of a challenge but offered some light relief from the few months of strict lockdown, as it meant that we were – safely – getting out and about much more than previously. In the last issue, we notified members on the Race to End Homelessness, an event run by the homelessness charity Crisis, the IPA’s Charity of the Year. The idea was to set yourself a target distance and then run, walk or cycle your way towards it. The event ran from 20-31 July, so not a huge amount of time to get those kilometres in!

Between eight of us in the IPA Secretariat, we managed a veritable distance of 720 km, raising £1,580.82! In particular, I was impressed by Lisa O’Hara, Nikki Haggis and Stephanie Miles – who really did go the ‘extra mile’ (ahem)! Thank you very much to all those who sponsored myself and others. It made those early morning runs all the more worthwhile, and your donations are going to a fantastic charity that is firmly at the forefront of tackling homelessness.

This newsletter issue features an interview with Lisa and Stephanie. Click here to read the article.

Elsewhere in this month’s issue, we have a roundup of our forthcoming online events, as well as an update from our President, Kevin Hellard, on his attendance at next week’s Scottish online event; an update on our website; an interesting article on mis-selling, courtesy of New South Law; a notification of the Department for Business, Energy and Industrial Strategy’s call for evidence on the recognition of professional qualifications; and insights from Committee and Secretariat members.

With the pandemic set to continue to shape the next few months, our events will be a great opportunity to consider some important lessons from the lockdown and prepare for what many believe will be a very busy few months ahead. With changes to legislation and new rules still bedding in, its never been more important to take stock, catch up (virtually) with colleagues outside our usual working day, and make sure we are prepared for the challenges ahead. Join us for a very important, and unique, roadshow series.

I also wanted to write about some important matters that are linked and have particular weight in the context of the pandemic.

Mental health, vulnerability, debt advice and advertising

Looking after our mental health is a key issue in today’s society, and the IPA made mental health and vulnerability amongst stakeholders a focus last year, with sessions on the topic at the IPA Roadshows, presented by Ken Marland, IPA committee member and Partner at Harrisons Business Rescue. Caroline Sumner, Technical Director at R3, joined Ken in giving a session on the subject at last November’s Personal Insolvency Conference.

We have previously notified members of our Aide Memoire for Insolvency Practitioners on dealing with vulnerable individuals. This can be accessed via the other regulation and guidance section of the IPA website and is a very informative and useful resource.

Parallel to this, our volume provider members will be aware of our requirement of them to only use FCA-authorised ‘introducer’ firms, who provide advice to people in debt and refer them on to insolvency firms, generally making a recommendation on the appropriate debt solution.

As many will know, those who find themselves in debt are likely to be in a state of vulnerability, and it is vital that they are given the correct level of advice as to the appropriate steps to take in managing their debt.

Employing the services of an FCA-authorised introducer firm, if you intend to use such a firm, is an essential step to take to ensure the interests of the indebted client and other stakeholders in insolvency processes are protected. We would recommend that all of our members, whether or not part of a volume provider firm, act in this manner.

Equally, and as the IPA has brought marketing into focus, all members should be aware that any other form of marketing that they employ should, as stated in the Code of Ethics, be clearly distinguishable as such and be legal, decent, honest and truthful. This is especially important in protecting the interests of vulnerable individuals, who can find themselves, through no fault of their own, exposed to the risk of signing up to an unmanageable plan to repay their debt.

We recently reminded members of the exemption from FCA regulation for Insolvency Practitioners. In the context of marketing, this exemption has particular significance for practitioners putting their name to a website for lead generation purposes. Insolvency Practitioners must not act outside the exemption. You can read the reminder that we sent out here.

To add to this, we have recently become aware of concerning activity where websites are set up that blatantly copy the charity debt advice sector and then package potential clients, through an FCA-regulated introducer, on to an Insolvency Practitioner. The IPA advocates for immediate curtailment of this practice, and though these websites are outside our jurisdiction, we are exploring ways in which we can support the ending of the practice.

With this in mind, we advise you to be vigilant to organisations that may approach you, or those you may be considering to work with, for marketing purposes. All forms of marketing, including websites and social media, should be fair and avoid unsubstantiated claims, such as references to Government-backed or approved schemes, perceptions of a high level of debt write off or general rights to employment claims.

We at the IPA appreciate that in the vast majority of cases, due diligence will be properly undertaken in respect of insolvency marketing. As the market in which Insolvency Practitioners operate continues to change, it is important for us as regulator to keep you abreast of changes and avoid any uncertainty.

If you would like to discuss this matter further, do get in touch with us on regulation@ipa.uk.com. I hope that this information is helpful.

That’s all from me for this month’s issue. As insolvencies look set to continue to increase following the winding down of the furlough scheme, I hope that you have been able to comfortably make any adjustments to your team as required, and please do get in touch if the IPA can support you over the coming months.

Michelle Thorp, CEO

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