The Insolvency Practitioners Association’s bid to act as watchdog for the controversial debt management industry has been a long time coming, but is now almost in place.

In May last year, its exasperated chief executive, Nick Sabin, said the IPA had only a few months’ worth of funds with which to lobby the government over its plans, which fell on deaf ears. But the IPA became involved in preparing the regulatory regime for the Debt Resolution Forum – a group of the UK’s 40 biggest debt management businesses.

The IPA’s move comes at a crucial time for the industry, which has faced claims of mis-selling to debtors, overcharging and making their financial situation worse.

With the banks breathing down the necks of debt management firms, it is now hoped the IPA can bring an air of respectability to the companies through its role as watchdog.

The main aspects of the body’s standards include measures to make sure appropriate advice is given to debtors, that fees and charges are made transparent and advertising material is monitored.

Client-facing staff will require adequate training, which will be monitored by the IPA. Complaints will also be monitored. The IPA will make an accreditation visit to all the members over the next 12 months.

Sabin said the IPA was not looking to change how insolvency practitioners are regulated, but it hoped to impact on those working around the IPs that are unregulated. ‘It’s about the quality of the advice given to the debtors when they first contact these companies,’ said Sabin.

But acting as watchdog will not drain the IPA’s resources, he claims. The Association will look to fill the regulator’s positions with people working in and around the debt industry, not solely from the IPA.

A budget for the forum and regulator will be finalised in the coming weeks. ‘We won’t do anything to weaken ourselves,’ added Sabin.

But if the banks think that closer scrutiny will lead to fewer IVAs and bankruptcies they are mistaken. The importance of the IPA’s role is amplified as Sabin expects the debt management market to grow.