BusinessBusiness RecoveryInsolvency Practitioners ‘not to blame’ for mis-sold IVAs

Insolvency Practitioners 'not to blame' for mis-sold IVAs

Northern Rock's criticism of mis-sold IVAs prompts strong reaction from insolvency trade body R3

Insolvency trade body R3 has hit out at claims by Northern Rock that its
surge in bad debts has been caused by missold IVAs.

R3 said it was ‘staggering’ that the bank had blamed inappropriate IVA
selling by practitioners as
increasing
its provision on unsecured loans
to £55.9m from £33.5m over the
past six months compared to a year earlier.

‘I find it staggering that Northern Rock are seeking to lay the blame for
their poor lending decisions at the door of IVA providers. Insolvency
practitioners don’t lend the money and they don’t spend it. They offer a
solution to help people sort out their debt problems,’ said R3 vice president
Nick O’Reilly.

‘I will be writing to Northern Rock asking for evidence of their claims that
9 out of 10 people have been recommended IVAs that are not in their interests.’

Northern Rock chief executive Adam Applegarth said that ‘nine out of ten’ IVA
proposals were unrequired and the individual only needed to reorganise their
finances, reported the Daily Telegraph.

‘We have a problem with practitioners of IVAs and refuse them if we don’t
think they are in the customers’ interest.’

Capital One was the last bank to call into question the IVA process,
announcing that it was looking to cap its fees paid to
practitioners.

Further reading:

Capital’s fee cap doesn’t fit all

IVA providers face crunch meeting today

Insolvency industry and banks thrash out
IVA fee structure

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

3m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

3m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

4m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

4m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

4m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

4m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

6m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

6m Emma Smith, Managing Editor