ABCUL calls for further measures to prevent IVA abuse

Tuesday 16 January 2024

ABCUL has called on the Insolvency Service and the Insolvency Practitioners’ Association to stop insolvency firms making money out of those disadvantaged by the coronavirus. Last week the largest provider of IVAs, Creditfix, wrote to creditors asking them to approve a £84.12 fee on each of their 86,000 IVAs – a £7 million coronavirus bonus for the firm – in order to review them. This is despite the IVA protocol being adapted to ensure additional support for those in IVAs facing further financial difficulties.

ABCUL has formally complained to CreditFix’s regulator, the Insolvency Practitioners’ Association, to ask that it ensures no firm will use the events of the past few months to profiteer. We understand the matter is now being investigated. ABCUL also contacted the Treasury at the beginning of Lockdown to ask for an assurance that they will monitor the activities of insolvency firms in the months ahead, as many more people find themselves financially difficulties. ABCUL has been concerned for some time that the lack of effective regulation of firms offering Individual Voluntary Arrangements (IVAs) in England and Wales, and Protected Trust Deeds, in Scotland. Last year we urged the UK Government to introduce a new regulator of the industry.

Robert Kelly, Chief Executive of ABCUL, said “We’ve long been hearing from our member credit unions that the nature of many IVAs are causing them concern, and we were worried that Covid19 presented a further opportunity for firms offering them. Sadly, it seems our fears were justified. We’ve complained to the appropriate regulators, and we’ll do what we can to ensure that this does not go ahead”.