Insolvency regulatory body R3 issues warning regarding unregulated debt advice services

The Association of Business Recovery Professionals, known by its brand name ‘R3’, is the leading professional association for insolvency, business recovery and turnaround specialists in the UK. R3 have recently addressed the issue of unregulated debt advice, issuing guidance on such businesses.

There are hundreds of websites that purport to offer free advice on how to deal with debt problems. R3 noted that these websites “can be incorrect or misleading, which could lead to people or businesses owing more money or in a debt solution which isn’t right for their circumstances.” It warned of websites who use outlandish claims in an attempt to secure business, such as promising to wipe all of a company’s debt whilst continuing to trade.

R3’s report concludes that “Whilst there’s nothing to stop people from taking informal advice in order to deal with their financial situation, for peace of mind it is always advisable for those facing financial difficulties to seek advice from a regulated professional, such as an insolvency practitioner.”

Insolvency Practitioners, known as “IPs”, are insolvency specialists, usually with many years working within the industry. IPS are highly qualified and have a wealth of experience providing professional advice. They are regulated and must be licenced by an authorising body, such as the IPA or the ACCA. Only an IP is authorised to administer certain financial solutions, such as a Company Voluntary Arrangement.

Before following any recommendations from a debt advice company, we suggest all consumers search to see if that company has any registered IPs on The Insolvency Service’s website. Focus Insolvency Group has three IP’s: Anthony Fisher (IP number 9506), Natalie Hughes (14336) and Gary Birchall (9725). Natalie, who is also Focus Insolvency Group’s Operations Director, said:

“There are plenty of companies and charities who will provide sensible debt advice, and when the time comes to put a financial solution in place, they will pass clients over to an IP. However, as R3 have highlighted, there are plenty of unscrupulous companies who will not offer the correct advice purely to drive clients towards a certain solution for which they can charge a larger fee. In order to ensure companies receive the best advice, we would always recommend that those seeking professional debt advice always speak to an IP in the first instance. If I can be of any help to you or your clients, please give me a ring on 01257 257030.”