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Does Consumer Duty apply to Creditors voting on an IVA Proposal?

15/03/2024
Does Consumer Duty apply to Creditors voting on an IVA Proposal?

In September 2023 we attended the excellent StepChange Debt Charity connect event and took the opportunity to ask Sheldon Mills if he would confirm that the Consumer Duty applied to Creditors voting on an IVA proposal?

Whilst many had assumed it would, there had been no definitive statement from the Finacial Conduct Authority and some parties were arguing that IVAs were outside the scope of the Consumer Duty as they were regulated by the The Insolvency Service and the Regulated and the RPBs.

We asked Sheldon if he was able to clarify the position? He said it was an important question and kindly agreed to ensure that it was answered after due consideration.

Following a period of investigation during which Consumer Duty Services was able to provide some helpful insights into current voting behaviours based on some detailed analysis of voting going back to 2017 and comprising a statistically significant sample of ver 100,000 accounts.

We are delighted to say that we have now received that answer from the FCA.

We will be presenting both that voting analysis and the FCA decision at our Creditor event on the 27th March in Grantham.

For those Creditors who have registered we look forward to seeing you there and giving you the information you need.

In the meantime our sincere thanks to the FCA and the team tasked with responding to this question. Your clarification will help drive better outcomes for all parties in relation to IVAs moving forward.

 

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