Mis-Sold IVA: Signs and How to Complain

What mis-selling can look like

An IVA may have been mis-sold if you were not given an honest picture of what you were agreeing to, or if it was clearly unsuitable for you. Common concerns include the following.

• You were told an IVA was your only option, without being told about free alternatives such as a debt management planDebt Management Plan (DMP)A Debt Management Plan is an informal arrangement to repay unsecured debts at a monthly rate you can afford. Learn how DMPs work, who they suit and what to consider.Read more → or Debt Relief OrderDebt Relief Order (DRO)A Debt Relief Order is a formal solution for people with low income, low debt and few assets. Learn how DROs work, eligibility criteria and what happens to your debts.Read more →.
• Fees were not clearly explained, or the amount creditorsHow to Deal with Creditors: Communication and NegotiationPractical advice on communicating with creditors, negotiating affordable repayments, and understanding your rights when dealing with the companies you owe.Read more → would receive was not made clear.
• You were promised that a set share of your debt would be written off before anyone looked at your finances.
• Your income or expenses were recorded wrongly, so the payment was never affordable.
• You were told you could not speak to creditors or other advisers.
• You were pushed to sign on the day, or the paperwork was rushed.
• The IVA was unsuitable, for example because your income was too low to make worthwhile payments.

First steps

1. Gather your paperwork. Collect the proposal, emails, call notes, fee statements and annual reviews.
2. Write down what happened. Note dates, what you were told and what you relied on.
3. Keep paying unless advised otherwise. Stopping payments without advice can cause the IVA to fail and may leave you worse off.
4. Get free advice. Speak to Citizens Advice, StepChangeStepChange Explained: What It Does and How It WorksWhat the debt charity StepChange offers, how its free debt advice and debt management plans work, who it suits and what to expect when you contact them.Read more → or National DebtlineNational Debtline: How It Works, When to CallWhat National Debtline is, who runs it, what it can help with, how to get free advice by phone, webchat or online tools, and what to expect.Read more → about your options, including whether to complain.

Complaining to the provider

Start with a written complaint to the firm that sold or runs your IVA. State what went wrong, why you think it was unsuitable or misleading, and what you want, for example a refund of fees, a change to the arrangement or compensation. Ask for a written response within a set time. Keep copies. A clear, factual complaint is more likely to be taken seriously than a long angry one.

Where to go next

Who regulates the provider depends on the activity. Insolvency practitioners are licensed and overseen by professional bodies and the Insolvency Service, which runs a complaints process for practitioners. Firms that give debt advice or arrange regulated activities may also be regulated by the Financial Conduct Authority, and in some cases you can take a complaint to the Financial Ombudsman ServiceHow to Make an Insurance Claim and What to Do If It Is RejectedStep-by-step guide to making an insurance claim in the UK, what evidence to gather, what insurers must do, and how to complain to the Financial Ombudsman.Read more →. Which one applies depends on the facts, and the rules can be complex, so ask a free adviser which route fits your case. The FCA Register shows whether a firm is authorised.

Time limits

Complaints often have time limits, so do not wait. If you are unsure whether you are in time, ask. Even if you are outside a limit for one body, another route may be open. Keep a record of when you first became aware of the problem.

Could a different arrangement help?

If the problem is that the IVA is unaffordable, a complaint may take time. In the meantime, talk to your practitioner about a review or payment break, and to a free adviser about alternatives. In some cases you may be able to change to another solution. Our guide to missed IVA payments explains what to do if you are struggling, and our comparison of IVA, DMP, DRO and bankruptcy lays out the options.

Beware of claims management companies

Some firms offer to bring an IVA complaint for you in exchange for a share of any compensation. You can make the complaint yourself for free, and free advisers can help. If you do use a claims company, read the fee terms very carefully, and check it is authorised. Never give out bank details or sign anything you do not understand.

Preventing a problem in the first place

If you are still choosing, our guide to how to choose an IVA provider explains the checks to make, and IVA costs and fees explains what to ask about money. Free advice before you sign is the best protection of all.

What to put in a complaint letter

A clear complaint is easier to deal with. State your name, reference number and the date you started the IVA. Explain in a few short paragraphs what you were told, what you now believe was wrong and what difference it has made. List the documents you attach. End by saying what you want the firm to do and by when. Send it by a method you can prove, and keep a copy. If the firm does not reply or rejects your complaint, you can take it further, and your letter becomes the start of that record.