Following last month's report from Price Waterhouse Coopers that the numbers of people taking up IVAs seems to be falling, this now seems to be reflected in trading reports.
Sharecast now report IVA provider Cleardebt saying that the last six months have been a testing period for the IVA industry as creditors put pressure on IVA providers to return a higher proportion of the debtor payment.
Sharecast quote the group as saying that: "Fortunately for ClearDebt, our flexible business model means we are able to offer what we believe to be the lowest cost IVA currently available and have not been failed by creditors on a fees basis".
Their claims about fees do seem to be borne out by their web site which sets the 'entry level' for IVA debtors at £7,500 rather than the mimimum £15,000 debt which seems to be the profit threshold for most of the IVA factories but The Manchester Evening News nonetheless reported that shares in Manchester-based ClearDebt slumped to a year-low after it posted interim operating losses of more than £450,000.
If this is another indicator that the IVA market is being squeezed, at one end, by creditors and, at the other end, by debtors put off IVAs by recent bad publicity then the competition for the business of wary and better informed debtors can only increase.
It will therefore be interesting to see if this leads to reductions in fees and improved service or even more aggressive marketing and increased mis-selling from a small number of major players trying to maintain their market share.
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