Overview: tough role

Nick Sabin, chief executive of the Insolvency Practitioners’ Association, has
quite a job on his hands. Sabin is in charge of a new regulator that hopes to
bring the controversial individual voluntary arrangements industry to heel.

Only a fortnight ago watchdog the Advertising Standards Authority slapped the
wrists of three well-known IVA providers, Accuma, W3 Debt Solutions and Money

Debt and Credit, for overblowing the financial turnaround indebted
individuals could benefit from through their companies.

Such stories, and others like them, have led to calls for more regulation and
better communication about what IVAs are about.

But will Sabin succeed?

What happened?

The Debt Resolution Forum, a consortium of 27 firms in the debt management
industry, held its first meeting in February 2006, and could be viewed as the
dawn of Sabin’s ambition that the IPA stand at the heart of regulation of the
debt management industry.

Sabin strongly but unsuccessfully lobbied the government last year in a bid
to accept the IPA as a regulator for the industry.

He said that the IPA was not looking to change how insolvency practitioners
are regulated, but the association hoped to impact those working around the
practitioners in the industry who are unregulated.

Despite his enthusiasm for more education in the industry, he is well aware
of the IPA’s role as watchdog and the importance of regulation with teeth.

‘Where people step out of line there will be serious action. They could be
thrown out [of the forum] or fined,’ he said.

What’s going to happen?

Over the coming weeks final details of how the forum’s watchdog will operate
will be resolved.

One of the bodies with the greatest interest in how the watchdog functions is
the British Bankers Association.

BBA chief Angela Knight has already come out in support of the debt
industry’s initial efforts at self-regulation, and all eyes will be on Sabin if,
or when, a member steps out of line.

Will Sabin move swiftly, and strongly, to stamp out bad practices?

Failure to do so could see sentiment grow for Debt Free Direct, a large debt
management business that is operating under its own particular self regulation.
It has commissioned an independent audit of itself for creditors.

If creditors are happy with Debt Free Direct’s approach then Sabin’s mission
might have all been in vain.