Payment for the introduction of an insolvency appointment is prohibited – a reminder

Alan Limb, Inspector

We would like to remind members about Paragraph R340.4 of the insolvency Code of Ethics. The paragraph states that an Insolvency Practitioner (IP), the firm or an associate shall not make, or offer to make, any payment or commission for the introduction of an insolvency appointment.

Recently, a number of members have alerted us to an approach received from an online marketing company that appears not to comply with this requirement. It offers to deliver referrals from an “insolvency website”, where the IP would be charged per lead received. The same opportunity has been introduced to some of the IPA’s own staff who hold Non-Appointment Taking licences. During our inspection visits, we review cases where payment has been made to an introducer for providing information that will be used in preparing an IVA proposal, a Statement of Affairs or a Declaration of Solvency. Such payments need to comply with SIP 9, as well as the Code of Ethics.