The British Bankers’ Association is in the final stages of establishing a set of protocols to help improve the image of the individual voluntary arr-angement sector.
At a recent debt forum with the Insolvency Service, the BBA called on IVA providers to help customers understand IVAs better and for improved literature to be developed over the next six months.
It said this should include clearer information about the consequences of entering into IVAs and whether IVAs are their most appropriate way for people to get out of debt.
The forum focussed on various aspects of IVAs including advertising and due diligence fees, as well as ex-ploring the possibility of developing a set of protocols covering all aspects of the IVA process.
Work on a standardised information pack will begin shortly and this is expected to be published in spring 2008.
The number of IVAs has risen in the past few years, reaching 44,000 in 2006, up from 5,000 in 2002. Northern Rock and HSBC both recently clamped down on IVA acceptances and credit card company Capital One has said it will reject IVAs where total fees exceed £4,500.
Capital One says the fees charged by debt management companies to people who take out IVAs are “in most cases excessive”.
Desmond Flynn, inspector general of the Insolvency Service, says: “The development of these standard protocols will produce clear benefits when it comes to the issues of transparency, fairness and the overall cost of the IVA process.
“We hope that this will enable IVA proposals to be dealt with on their merits, which would be in the best interests of debtors and creditors.”
Eric Leenders, executive director of the BBA, says: “All that is left is the fine detail to be thrashed out. We hope the full set of IVA standards will be fin-alised by the end of this year.”