Spiralling levels of personal debt have led to a big increase in the number of people struggling to manage their debts. The latest figures show 10,000 people a month are starting personal insolvency proceedings in the UK. The boom in personal insolvency has led to the springing up of numerous debt management companies which promote themselves as being able to help individuals through their financial crises.

 

As is typical with unregulated industries, there have been many complaints about the quality of the service offered by what have become known as ‘IVA factories’, because frequently the solution offered is to enter into an Individual Voluntary Arrangement, which may not always be the best option available.

 

Recently, twenty debt management companies have announced that they are to set up a regulatory body, by establishing the Debt Resolution Forum (DRF), which will act as an independent overseer with the aim of promoting best practice in the industry. The DRF is expected to have the power to fine members who fail to act appropriately towards either debtors or creditors and to have the authority to publicise such decisions.

 

The DRF will be backed by the Insolvency Practitioners Association, which will audit members of the DRF for compliance with best practice and investigate complaints.

 

However the Department of Trade and Industry is said to be incensed that the organisation is using its logo without permission and has stated that it does not endorse the new organisation, so the credibility of the new website iva.com is being questioned.