When a person endeavours to sort out their debt issues, they are often inundated with different suggestions and advice. Sometimes this could be due to the fact that they've approached debt management or IVA (Individual Voluntary Arrangement) companies that are providing advice geared towards their own commercial interests. Sometimes though, this might result from advice provided by cold-callers, although "advice" is a word used here in a very loose sense. The sales pitch provided by cold-callers seeking to sell an IVA frequently includes uninformed and optimistic promises which are unlikely to come to fruition.

A key question that is always asked is how the heck such cold-callers ever got hold of the information of the person. A major source of such info is actually loan brokers who might've already been pursued in a last-ditch attempt to handle debt repayments rather than venturing down the road of accepting debt advice. The cold-callers understand that an individual on these lists can be a likely candidate for selling an IVA.

The market for purchasing such information and similar types of lists is substantial and forms a main part of the marketing activities of some IVA companies and agents. As well as IVAs and debt management plans, these providers will also frequently sell debt elimination plans and PPI claims services, as well as the infamous "unenforceable credit contracts" agreement that regularly fails to provide what is promised. Such services require large upfront fees to be paid before any work starts.

Of course, such offers may be enticing to any person who's in an unfavourable monetary position. It's therefore understandable that desperation might lead to a person paying before an understanding of the firm, plans or services has been made. The phenomenon has been noted by Citizens Advice, which has acted through the means of a "super-complaint" to the OFT (Office of Fair Trading). Such a super-complaint challenges the OFT to look into the matters further.

Cold-calling by IVA providers must therefore be a practice that's now at risk; this is no different to other areas of the UK financial services where this has been an issue for a while.

Some IVA agents may charge upfront funds before an IVA is even passed to an Insolvency Practitioner who can actually provide the work, with one or even multiple payments being made to the agents (typically debt management companies) before the process starts. There's no advantage to the consumer for paying this money upfront, in fact they're risking a delay in the commencement of their IVA, stretching the time during which they are legally exposed to creditors, and paying money over that surely could have been put to better use elsewhere.

Therefore, an individual thinking of commencing an IVA should steer clear of the promises and services of any IVA firm that's cold-called them on the topic.

Carrying out research into direct IVA providers is a more productive route to think about, in order to recognise those who are reliable and invite good consumer feedback. The final result is likely to be a quicker and more appropriate direction to sorting out any lurking debt problem.