Straight forward consumer individual voluntary arrangement hereinafter referred to as a Protocol Compliant Individual Voluntary Arrangement (PCIVA).
Purpose of the protocol
1.1 The purpose of the protocol is to facilitate the efficient handling of straightforward consumer individual voluntary arrangements (IVAs) (as described below). The protocol recognises that the IVA supports a valid public policy objective by providing debt relief for individuals in financial distress. It also recognises that at the centre of this process there is a person, who needs to understand the process and the associated paperwork and the impact that the IVA will have on their lives.
Scope of the protocol
2.1 The protocol is a voluntary agreement, which provides a standard framework for dealing with straightforward consumer IVAs and applies to both IVA providers and creditors. By accepting the content of the protocol, IVA providers and creditors agree to follow the processes and agreed documentation that forms part of the protocol. IVA providers indicate their acceptance of the content of the protocol by drawing up a proposal based on the standard documentation, and which states that it follows the protocol. Creditors are expected to abide by the terms of the protocol in relation to proposals drawn up on that basis.
2.2 While IVAs are a product of insolvency legislation those IPs who are subject to FCA authorisation whether through their firm or as an employee of an FCA authorised firm must comply with the FCA's Consumer Credit Sourcebook (CONC). They may adopt processes and procedures that comply with CONC so long as to do so would be consistent with insolvency legislation.
2.3 Creditors who are members of the British Bankers' Association have indicated their support for the protocol process in a letter attached at Annex 1. A list of BBA members can be found at www.bba.org.uk.
2.4 It is accepted that an IVA is a regulated process under statute, which requires certain work to be undertaken, which may have a cost unconnected with the size of the IVA.
2.5 The protocol does not override the regulatory framework relevant to each party (Annex 2).
2.6 For the avoidance of doubt, IVA provider means both insolvency practitioners and IVA provider firms employing insolvency practitioners. References to creditor in this protocol refer to both creditors and the agents who vote on their behalf and act in accordance with their instructions in relation to an IVA. Consumer means a person in debt or the debtor.
2.7 The efficient operation of the protocol will be monitored and reviewed by a standing committee. The standing committee is a representative group, its membership reflecting the participants in the IVA process (consumer, creditor, IP, regulatory bodies and government). The terms of reference of the standing committee and details of its current membership are attached at (Annex 3). The committee's role will
include communication and consultation, where necessary, on future developments on the IVA protocol.
2.8 The FCA describe vulnerability as follows. "A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care." A firm should have clear and effective polices to identify consumers in vulnerable circumstances and deal with such consumers appropriately. Financial difficulties can be a potential type of vulnerability but IVA providers and creditors also need to consider a wide range of potential vulnerabilities in order to support consumers in in vulnerable circumstances. Further information can be found at: http://www.fca.org.uk/yourfca/documents/occasional-papers/occasional-paper-8.
2.9 If the consumer is struggling with the standard processes, the IVA provider should make appropriate arrangements for the consumer to interact with the IVA in a way that is appropriate to the consumer's needs. The IVA provider could alsoconsider engaging family members, health professionals and charities who have no financial interest to support vulnerable consumers (not just those who are financially vulnerable).
2.10 Explicit consent needs to be obtained from the consumer to disclose and record vulnerabilities such as terminal illness, mental health issues, age etc. Full transparency is recommended as creditors should take these vulnerabilities into account when considering an IVA proposal.
Downloads
11 May 2021
Back to list