Go For Bankruptcy, Advises Unregulated COmpany

A company called the IVA Council (IVAC) has been mailing people in debt, advising them to default on their repayments so it can step in and help them become bankrupt.

The unregulated company says that many thousands of people have received bad advice and have been shepherded into Individual Voluntary Arrangements (IVAs). The company says that many of these should not be trying to make repayments, but should go for bankruptcy instead.

In recent weeks it has sent out up to 4,000 letters to customers of debt-advice services, the details of which it bought off the Insolvency Agency – backed by the government. Calls have been made to make the database less widely available, and also complaints have been made that sensitive information can be viewed through the envelope’s window.

IVAC had a website that was a close copy of the Insolvency Service’s website, but was forced to change the site last week.

The IVAC has admitted that it does not have authority to advise people to default on payments and has now changed its letter to accuse IVA providers of mis-selling, and saying: “The IVAC has noted a pattern of inconsistencies that may indicate that you may have been mis-sold your IVA… These IVA factories are offering only IVAs as debt solutions and are not exploring any alternatives.”

Malcolm Brown of IVAC said: “We unfortunately alienated a large part of the industry by targeting all IVA customers initially. Together with the first website we created, yes, that was a terrible mistake. But we have learned from our mistakes and have since decided to target five main IVA factories that we believe are not properly advising their customers. They tell people they cannot do a bankruptcy because it will ruin their credit rating, but there is no real credit blacklist in this country. Many of the people we have come across would be better off filing for bankruptcy and they have been mis-sold IVAs on the basis that they won’t lose their assets. But most of these people have nothing to their name, they have nothing to lose if they file for bankruptcy. Instead, they are dragged into making debt payments they cannot afford to repay.”

Derek Oakley, the insolvency director of Debt Free Direct, an IVA provider targeted by IVAC, said: “These people are unqualified and unregulated, which is ironic as all people who have taken on an IVA have done so with a regulated service.