Whilst the regulation will offer enhanced consumer protection, Terry Balfour, director of IVA.com is worried that reducing fees could harm the quality of advice these borrowers receive.
“The issue of IP fees has not been fully addressed. Some IPs may frown upon the prospect of reduced fees which could trigger the influx of less qualified individuals working on IVA applications," he said.
“And should the fees fall to a level where consumer IVAs are no longer viable, certain individuals could be excluded from this debt solution which will force them into bankruptcy or long-term debt management plans."
He concluded: “Although IVAs are not suitable for everyone – and indebted borrowers should seek professional advice before entering this debt plan – an IVA can be a viable alternative to other debt solutions."
