The problem was identified following research - quoted in the report - and carried out by Debt Free Direct (not the most independent of sources) in 2004.
They concluded that:
The Working Group agrees that the existence and usefulness of the IVA needs to have a higher profile, possibly through advertising. However, both the funding of such advertising and where those responding to the advertisements would be directed are issues to be addressed, particularly as some nominees and supervisors are not members of R3 and have a variety of regulatory bodies.They nonetheless asked respondents in Q.12 of their consultation to come up with practical suggestions to increase awareness of IVAs.
The response to the proposals for Improving IVAs were published in January 2006.
By then, they were able to report that the majority of respondents thought that "there is already adequate awareness among consumers of the IVA process, especially with the recent rapid rise in numbers".
The Insolvency Service report therefore drily noted that:
In the year ending 31 December 2005 there were 20,293 IVAs, this shows an 88.7% increase on the 2004 figures. We do not propose to take action to increase awareness of IVAs at this time.It seems surprising that some of the stakeholders on the Working Group did not already know from their own sales figures that IVAs were being taken up at significantly inreasing rates when the original proposals were published.
It is perhaps less surprising that the IVA providers did not really need that much more encouragement from the government to boost its advertising and marketing spend to increase consumer awareness of IVAs and the take up of the arrangements.
Not surprising - to quote Jack London - "for they alone knew how to reap the whirlwind and make a profit out of it".
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