IVA Industry Survey on Debt

There have been calls for better regulation of the credit and debt solution industry based on research conducted by IVA.co.uk.

The release of the Department of Trade and Industry’s insolvency statistics for Q1 2007 spured the IVA.co.uk Debt presentation by Ipsos Mori. This was followed by a discussion between a panel of experts and the audience.

The discussion focused on factors causing the increase in insolvencies.

Poor lending and borrowing practices were blamed for Britain’s debt crisis, with lenders keen to push cheap loans, and consumers reluctant to repay them. The research states that 43% of consumers consider this the key factor to behind the national debt crisis, while 32% consider irresponsible borrowing to be the key factor.

Consumers were asked to identify the main reasons people fall into debt. More than half the survey group identified poor money management as the main reason, with unemployment and ill health following.

The problem of a lack of faith in the debt solutions industry, and a strong call for regulation was als revealed. More than three quarters of those polled considered mis-selling in the industry to be common with one third listing it as common.

When asked about the possibility of further regulation in the debt solutions industry, over three quarters of respondents were in support of increased regulation for the loans and debt management industry.

The expert panel uniformly agreed that regulation is needed, but varied in their preference for statutory regulation.

However, other reports state that the IVA industry is causing much of the problem. They force banks to drop part of the unsecured and secured loan debt, in return for the borrower not declaring bankruptcy on the entire debt.

Stuart Pike is a Director of Inter Financial Limited, based in Guernsey in the Channel Islands. Through their website All About Loans Inter Financial offer advice and information which is all about loans and personal finance in the UK.