Advertisement regulator to begin IVA enforcement

This action will be taken against misleading advertisements and websites by insolvency practitioners and lead generators for IVAs. This is because adverts targeted at consumers with debt problems have the potential to cause serious detriment if they don’t comply with advertising rules. 

It comes off the back of several rulings about IVA ads. These ads offered consumers a way to write off debt in government-approved schemes but were not placed by Financial Conduct Authority (FCA) authorised debt advisers but by lead generation companies or insolvency practitioners. 

Under the new rules, IVA adverts must clearly state the risks and fees involved, while lead generators must include a clear and prominent statement that they’re a lead generation company that will pass on customer leads to third parties. 

These adverts, however, must not imply association or approval from government, debt charities or regulated advisory bodies, and claim customers can “write off up to 85% of their debts” or similar in the absence of robust documentary evidence. They also must not exaggerate the simplicity or speed of the process or claim that customers can “lower your debt today”. 

From 25 July, the ASA’s compliance will take targeted enforcement action to ensure a level playing field, which may include - where advertisers are unwilling to comply - referral to Trading Standards or an appropriate recognised professional body. 

Commenting on the news, CAP’s director Shahriar Coupal said: “Our enforcement notice sets out the steps that insolvency practitioners and lead generation companies must take to ensure they advertise debt management services responsibly. 

“Where they mislead, these ads have the potential to cause serious financial detriment as well as emotional harm to people experiencing debt. In the context of a cost of living crisis, our enforcement notice is uncompromising – marketers of debt management services must stick to the rules or they will face enforcement action.”

StepChange’s director of external affairs Richard Lane, meanwhile, said CAP and the ASA are showing “admirable commitment” to trying to clean up the “squalid market” in IVA advertising. 

He added: “However, seeking to monitor and hold to account those who are flouting the rules will be a massive task, as the problems are so widespread and the perpetrators so opportunistic and persistent.

“We encourage anyone who does spot a misleading advert to report it, and we especially urge anyone experiencing financial worries to be vigilant about any advertising that purports to offer easy solutions to debt, or to push you towards one particular solution like an IVA. 

“StepChange and other reputable debt charities would not suggest a solution without a full understanding of your own individual circumstances, and adverts that try to do this are unlikely to have your best interests at heart.”