Debt manager shuns new insolvency watchdog

One of the biggest debt management companies has declined to join a new
self-regulatory regime, casting doubt on the quality standards of the new

A fortnight ago a group of debt management companies set up a regime of
self-regulation called the
Debt Resolution Forum, under the auspices of the Insolvency Practitioners’
Association (IPA), amidst fears that Individual Voluntary Agreements were being
missold to individuals who would be better off in bankruptcy.

But Debt Free Direct, one
of the largest companies in the industry with a turnover of £12m, has said it
will not join at the outset, opting instead for an independent audit from an
unnamed firm.

Finance director Paul Latham said it will not join until it is convinced the
body is setting a high enough standard. ‘The DRF hasn’t defined its standards.
If they are as high as ours we’d be delighted to join but our concern is they
need to pin their values to the mast.’

A meeting to thrash out details of how the DRF’s regulatory arm will operate
will take place next week.

‘Our audit will show we advertise our services responsibly; that we verify we
get the best offer from debtors; and appropriate advice is given to debtors. We
had a very enthusiastic response from creditors on our [audit]scheme,’ said

IPA chief executive Nick Sabin said he was committed to ‘staying in touch’
with the company and expects them to join the forum later.

Further reading

IPA to set up regulator for
debt management firms

Debt Free Direct posts
massive growth

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