Individual Voluntary Arrangements (IVAs) are a popular debt solution, providing individuals with an alternative to bankruptcy. However, where there is a legitimate and beneficial financial solution, there are also scammers looking to take advantage of vulnerable individuals. In this blog post, we will explore the topic of IVA scams. We will highlight common warning signs and provide practical tips to help you avoid falling victim to these scams.
Understanding Individual Voluntary Arrangements (IVAs)
Before delving into the world of scams, it’s important to understand the legitimate concept of IVAs. An IVA is a legally binding agreement between an individual and their creditors to repay debts over an extended period, usually five to six years. It allows individuals to make affordable monthly repayments while protecting them from legal actions by creditors.
Identifying IVA Scams
Unsolicited Contact: Be cautious if you receive unexpected calls, emails, or text messages regarding IVAs. Reputable companies will not cold-call individuals to offer their services. Legitimate providers follow strict guidelines and will typically only respond to inquiries made.
Excessive Fees: Some scammers may charge exorbitant upfront fees for their services, often before providing any substantial assistance. Be wary of any company demanding large payments before helping you set up an IVA. Trusted providers will disclose their fees transparently and typically charge a percentage of the monthly repayments. Generally there are no up front fees to pay.
Pressure Tactics: Scammers may employ high-pressure sales tactics, urging you to make hasty decisions without fully understanding the implications. Legitimate IVA providers will give you time to consider your options and will provide all the necessary information to make an informed decision, as required by regulation.
False Promises: If a company guarantees to write off a significant portion of your debt or promises to remove negative credit entries instantly, it’s likely a scam. Legitimate IVAs are based on realistic repayment plans, negotiated with creditors, and aim to provide a manageable path to becoming financially-free.
IVA Mis-sale claims or Government write off: It is extremely important that if you are already in an IVA, that it is the correct debt solution for you. You should have been provided with tailored advice at the outset and have been able to make a fully informed decision regarding proceeding with the IVA. If you are unsure, and no longer believe the IVA is suitable for you – the best thing to do is speak to your Insolvency Practitioner who will investigate for you. Sadly there are individuals and companies who claim to be able to negotiate with your Insolvency Practitioner on your behalf whilst you pay them the equivalent of your IVA contribution during an IVA mis-sale claim or in recent times, promises of Government intervention and write off due to Covid-19 or cost of living crisis. Unfortunately, these are not legitimate and take advantage of individuals who are financially vulnerable. By paying these firms, who in turn do not actually speak with your Insolvency Practitioner, you will be falling into arrears with your IVA. If in any doubt, speak to your Insolvency Practitioner.
Protecting Yourself from IVA Scams
Research Thoroughly: Before engaging with any provider, conduct thorough research. Look for customer reviews, testimonials, and independent ratings of the company. Check if the company has a licensed Insolvency Practitioner by name checking them on the Insolvency Service website and check whether they are authorised by the Financial Conduct Authority (FCA), who regulate the provision of debt advice.
Seek Professional Advice: Consult a licensed Insolvency Practitioner or a reputable debt advice organization. These professionals can guide you through the process, explain your options, and recommend trustworthy IVA providers. They will help ensure that your IVA is set up correctly and in your best interest.
Verify Credentials: Always verify the credentials of any company or individual offering IVA services. Check if they are licensed, registered, and have a legitimate physical address. Confirm their professional affiliations and certifications.
Read Contracts Carefully: Scrutinize any contract or agreement before signing. Ensure you understand the terms and conditions, including fees, repayment amounts, and duration. If anything appears unclear or overly complicated, seek clarification from the provider or an independent professional.
Stay Informed: Keep yourself updated on the latest scams and fraudulent activities related to IVAs. Regularly visit official government websites and reliable financial news sources to stay informed about potential threats and emerging scams.
Individual Voluntary Arrangements provide a lifeline for individuals struggling with debt, but unfortunately, scammers are always ready to exploit vulnerable people. By remaining vigilant and following the tips outlined in this blog post, you can protect yourself from IVA scams. Remember, reputable providers prioritize your financial well-being and will work with you to develop a sustainable debt repayment plan. By staying informed, seeking professional advice, and being cautious of warning signs, you can confidently navigate the world of IVAs and avoid falling victim to scams. Take control of your financial future and ensure that your journey toward debt relief is secure, legitimate, and in your best interest.
At Debt Movement we provide professional debt guidance and solutions that help you move out of debt. We offer non-judgemental financial guidance to relieve the burden of financial strain and offer support on your journey to financial freedom. Request a free call back today.
