UPDATED 28-01-2010 - OFT warns consumers about misleading IVA mailings

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UPDATE: http://www.credittoday.co.uk/news/news-item.cfm?news=1498

As said, avoid these companies at all costs and contact your IP.

A company called the IVA Review Board (IRB) is sending letters to debtors in individual voluntary arrangements (IVAs) suggesting they may be able to stop making payments – despite attempts by the Office of Fair Trading (OFT) to revoke its licence.

The group also refers to itself as the Department for Personal Insolvency Review and Assessment, and is licensed under the Consumer Credit Act.

On 18 December the OFT revoked the licence from parent company INTL Marketing, but the firm has launched an appeal. Until the case is settled the company still holds a licence.

Industry experts warn that the letters could lead to debtors having their IVAs terminated. Mark Sands, head of bankruptcy at Tenon Recovery, said: "Once arrears go beyond a certain level then it’s likely the IVAs will be terminated and the debtor will have to start all over again."

It is not known if the IRB is connected to the IVA Council, which gained notoriety in 2008 for contacting people in IVAs and claiming they had been mis-sold the arrangements.

Insolvency practitioner David Mond secured an injunction against the IVA Council and a £25,000 fine.

Mond said: "It’s diabolical that these parasites have the opportunity to approach people in financial difficulties."

A spokeswoman for the Insolvency Service said: "If people in IVAs receive any unsolicited communication suggesting that they stop making payments, they should discuss this in the first instance with the supervisor of their IVA."

Despite repeated attempts to contact the IVA Review Board, at the time of going to press it had not return Credit Today’s calls.

Original post:

Still seem to be companies doing this, so here is the OFT's WARNING from last year.

From: OFT warns consumers about misleading IVA mailings

5 June 2008 The OFT is warning consumers to be careful before responding to unsolicited mailings which advise them to cancel existing individual voluntary arrangements (IVAs) and which suggest they opt for an alternative debt management solution such as bankruptcy instead.

Some such mailings sent out to consumers misleadingly suggest to recipients they may have been mis-sold the IVA and/or that bankruptcy may be more suitable for their circumstances when this may not be the case. These mailings are being targeted at vulnerable consumers in IVAs by companies who appear to have accessed their personal contact details from the public register of people in IVAs which the Insolvency Service is required by law to maintain.

The OFT considers such claims to be in breach of its debt management guidance not only if they are misleading but also if they fail to explain the consequences of terminating an IVA agreement and going bankrupt which include:

• Much of the initial monies paid to a company on setting up an IVA going towards meeting the insolvency practitioner's fees and not paying off the debt itself. Therefore, if the IVA fails early on, creditors will not have received any payments, the consumer's debts will not have decreased and their financial position is likely to have worsened.
• The option of bankruptcy having far reaching consequences including consumers losing control of their assets, potentially having their home sold and facing restrictions in carrying on businesses and obtaining credit.

The OFT has issued warnings to 12 businesses and has given them four weeks to respond. They have been told to amend any misleading claims made in their IVA advertising and promotional material and to be more transparent about the possible implications for consumers if they do terminate an IVA agreement. The OFT will consider taking action against any business that fails to address our concerns. Such action could include taking steps to revoke consumer credit licences held by the business.

Ray Watson, OFT Director for Consumer Credit, said:

'Tackling companies who are engaging in unfair business practices by targeting vulnerable consumers with misleading advice and information, particularly if it leads to consumers becoming more over-indebted, is a key priority for the OFT. We expect any advice and/or information given to debtors to be in their best interests and it should include a full explanation of the implications of offers or advice.'

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Original post now updated, as this practice is continuing under the the guise of new "companies".

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http://www.oft.gov.uk/news-and-updates/press/2011/56-11

OFT revokes companies' licences for misleading IVA mailings

56/11 15 April 2011

The OFT has found four businesses and/or their associates targeted consumers with misleading unsolicited mailings claiming the recipients may have been mis-sold an Individual Voluntary Arrangement (IVA).

As a result the OFT has revoked the consumer credit licences of Bankruptcy Limited (BL), Intl Marketing Limited (IML), UK Bankruptcy Limited (UKB) and UK Mortgage Link Limited (UKML).
The companies and/or their associates operated mainly out of the Dorset area.

Some were linked to potentially misleading trading names such as 'The IVA Council', 'IVA Review Board' and 'IVA Watchdog'. The businesses were associated with each other in various ways, including through certain common directors.

The mailings sent suggested that bankruptcy may be a better option for consumers, when this may not have been the case.

Consumers accepting the advertised services would have had to pay additional fees to switch to a different debt solution that may not have been in their best interests.

As such, the poor quality advice and misleading nature of the mailings breached the OFT's Debt Management Guidance.

BL and IML appealed against the OFT's decisions. The revocations of their licences took final effect when IML's appeal was struck out by the appeal Tribunal in March 2011 and BL withdrew its appeal in March 2011.

David Fisher, Director of the OFT's Consumer Credit Group, said:

'Companies must not use misleading mailings or give advice that they know may not be in the interests of borrowers. Where the OFT has evidence that companies have breached its guidance, it will use its powers to stop them from doing so again.'

NOTES

1. The OFT also refused to grant licences to two other associated businesses, Petitions Direct Limited (PDL) and UK Restart Limited (UKR).
2. The OFT's action follows a warning to 12 debt management businesses on 5 June 2008 about issuing misleading IVA mailings.
3. The Consumer Credit Act 1974 (the Act) requires most businesses offering credit services, including lending money and high risk debt management activities, to be licensed by the OFT. The OFT can refuse or revoke a licence if it decides a trader is not fit to hold one. Details of the OFT's recent findings from the debt management guidance compliance review are in the press release OFT takes action to address widespread problems in debt management industry (28 September 2010).
4. For advice on dealing with debt, see the Directgov website.