As the amount of Individual Voluntary Arrangements (IVAs) in the UK continues to increase, a lawyer has issued a warning that IVA providers need to be more careful with their advertising. The amount of misleading advertising on IVAs was first highlighted by Debt Free Direct, and has now prompted many industry professionals to agree.

Andrew Gregory, partner and head of business at DWF made his concerns public as the first figures on insolvency for the year have been revealed as 30,075 for the first quarter.

Mr. Gregory, whose team advises a large number of organisations in the finance industry including banks, trustees in bankruptcy, and IVA providers, says we can now expect to see almost 130,000 personal insolvencies this year.

His warning follows the sentiment of the Advertising Standards Agency (ASA) who investigated many IVA advertisements this year following complaints from consumers and the debt advise industry that advertisers were over exaggerating the benefits of IVAs.

“With the ever increasing amount of personal debt in the UK economy it is good that consumers can choose from a range of debt solutions. However it is very important that the advantages of these solutions are not exaggerated and that IVA providers are careful not to make misleading statements,” Mr. Gregory said.

“IVA providers must ensure that their advertisements are honest and open and accurately reflect the level of their fees and the minimum settlement that creditors are likely to accept. Creditors are no longer willing to agree to dividends with disproportionate administrative costs,” he added.

"IVA advertisements must reflect this commercial reality, or providers will face further intervention from the ASA and criticism from others in the industry, and risk causing longer-term damage to their reputation."