'Debt Advice' recruitment boom in Manchester ?

It looks like demand is booming for 'debt advisors' in Manchester. A recruitment consultancy called Corebusiness are currently advertising for IVA/Debt Advisors for a number of their clients. Not just one client !

clipped from jobview.monster.com

Debt / IVA Advisors UK-NW-Manchester

Apply Online

We have a number of clients seeking people who have a telesales or customer service background in finance. You will be responding to enquiries and selling the benefits of either a Debt Management programme or an IVA. You will be an excellent communicator and have the determination to succeed and earn a high salary

Additional Information. Location: UK-NW-Manchester
Salary/Wage: 16,000 - 18,000 GBP/year Bonus OTE 28k

The Corebusiness advert is interesting because they are recruiting 'debt advisors' but there is no requirement for any experience or qualification in debt counselling and advice. The emphasis is on candidates able to sell either DMPs or IVAs to achieve the commission based earnings quoted in the advert.

The companies selling IVAs need salespeople to maintain both profits and market share but the industry is trying to regulate 'debt advisors' through the new Debt Resolution Forum. It seems unlikely that sales targets and the linked sales-related earnings can be reconciled with the need for objective debt counselling that the regulators want to establish.

Surely the ideal counselling skills and the objectives of the 'regulators are just too far apart from the realities and objectives of the debt industry for the Forum to work ?

Googling 'Debt Resolution Forum'

Without intending to make a point about the lack of regulation of the IVA providers, The Mole decided to follow up on his article below by running a google search using 'Debt Resolution Forum' as the search term and, irony of ironies, the results produced links to various statements about the virtuous Forum but those references were surrounded by links to the dissolute.

So, in the red corner we have the knight in shining armour and in the blue corner we have a company called Debt Specialists with a google ad that provides a link to their site which says: "Debt solutions. Take 60 second debt test and see if you qualify to write off 95% debt". They make the same 95% debt reduction claim on their web site under the heading of 'Flexible IVAs'.

And in the blue corner we also have Debt Advisor Online with another google ad which says "Debt Resolution. Reduce your debt now. Up to 95% debt written off." The link also leads to a similar promise on their web site.

The OFT recently issued warnings to (anonymous) companies who the OFT said were falsely claiming that 'up to 90 per cent of your debt may be written off' when the maximum would be in the region of 60 – 70 per cent.

And here, when we google for the new policeman on the block we can come up with two 'advisers' that promise debt reduction of 95%..

The Mole suspects that the Insolvency Practitioners Association - who are heading up the Debt Resolution Forum - may find that it is preaching the virtues of chastity in a brothel full of pimps.

Too little, too late ?

Toothless 'Debt Resolution Forum'

Financial Director report that the Insolvency Practitioners' Association (IPA) will now monitor, regulate and accredit members of a new body called The Debt Resolution Forum that represents the biggest IVA and debt resolution companies in the country.

This seems to be overstating the case because the biggest 'IVA provider' has refused to join and the Department of Trade and Industry has said that it does not endorse the new body.

The head of business recovery at leading regional law firm DWF has already criticised the Forum in a press release saying that this attempt at self-regulation will not have sufficient teeth to punish cases of malpractice.

The Forum's aims are nonetheless admirable. According to the report, the members have agreed to sign up to the body's standards, which include measures to make sure appropriate advice is given to debtors, fees and charges are made transparent and advertising material is monitored.

The 'monitoring' will be carried out by the IPA who will apparently make accreditation visits to all of the Forum's members over the next 12 months. This seems odd because the IPA is already supposed to monitor the standards of the practitioners who are members of the association.

It seems likely that the lesser qualified insolvency practitioners - those who had not first qualified as either accountants or solicitors - would tend to be members of the IPA rather than the other professional bodies and it also seems more likely that these are the IPs most likely to be employed by the 'IVA providers'.

The IPA is already supposed to be 'monitoring' the standards of these members who are acting as 'office holders' in insolvencies by supervising IVAs but perhaps this is where the nonsense begins.

How do the IPA - or any of the other regulatory bodies - discipline IPs who are not partners in traditional insolvency practices and are simply employed by one of the 'IVA factories'? The IPA cannot impose standards on an employer and it seems that the occasions when they might revoke a practitioner's licence are extremely rare.

In the past, the IPA's critics have complained that their monitoring of professional standards is little more than a box ticking exercise and their disciplinary powers certainly seem to be exercised with extreme caution.

According to their 2005 Report, the IPA only had 291 members actually serving as insolvency office holders but they still had to complete investigations into 209 formal complaints that year.

The IPA dismissed 184 of the complaints, issued 9 warning letters and 10 insolvency practitioners agreed to accept reprimands.

In what seems to be the most serious case, summarised as : "Remuneration taken in excess of that approved by creditors (five cases)" the IP was reprimanded, fined £,3750 (easily recoverable from the profits of one IVA) and his activities were temporarily restricted.

There may be mitigating circumstances in this particular case but let's be clear about this. Insolvency practitioners hold the funds paid to them in trust. If they take money that has not been approved by creditors they are breaking the law. This is spelt out in Statement of Insolvency Practice 9 (SIP) and copies can be downloaded from the IPA's own web site.

Breaches of trust and fiduciary duty should rank quite highly on the disciplinary scale employed by any regulator but, if offences as serious as this top out at a reprimand and a £3,750 fine, then it does not bode too well for the IPA's role in this latest bid for self-regulation by the debt industry.

It seems hard to avoid the cynical conclusion that the Debt Resolution Forum will be used by some of the IVA providers as a marketing tool to persuade uninformed debtors that they are regulated by an authority with an impressive sounding name but no power to regulate.