The Wider Debt Advice Market

The IPC noted during its meetings that the frontiers between the work of IPs and those of other debt advice organisations were becoming more blurred. Most of the large IVA providers now effectively offer advice to distressed debtors on the full range of options both statutory and informal for dealing with their problems and are increasingly themselves providing both types of product.

One of the major not-for-profit sector debt advisers has recently announced its intention to provide IVAs. Individual debtors are therefore likely to be faced by a bewildering range of products and advice on how to deal with their problems. We therefore decided that, although our remit is the professional and ethical standards of IPs, we at least needed to acquire a better understanding of the wider debt advice sector and the products it offers.

We had discussions during the year with the Consumer Credit Counselling Service, Debt Free Direct, the Money Advice Trust (MAT) and, as mentioned earlier, the CABs and the OFT (which licenses many of the debt advice firms). Through our contacts with the Insolvency Practitioners Association (IPA) we kept in touch with the efforts to create common professional standards for the commercial debt advice sector, which led in October 2006 to the setting up of the Debt Resolution Forum (DRF) which embraces a large number of the commercial firms in the sector.

The DRF aims, with the support of the IPA, to establish an accreditation system with common training standards and a self-regulation system based on common professional and ethical standards. We think this is a promising initiative, though a good deal of work remains to be done to achieve the goals the DRF has set itself.

We were likewise pleased to learn of the similar efforts being made by the MAT to establish common standards for debt advisers in the not-for-profit sector. Together with the work launched by the recent IVA Forum in Birmingham organised by the IS and the BBA, these initiatives have opened up the possibility of establishing common professional standards for the whole personal debt advice sector. This would be a highly desirable outcome. We will continue to watch developments with interest.

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