A reader asked:
I’ve been told I have to give my IVA firm my online banking login details so they can see my bank statements. Why do I have to do this? Yet another thing they never tell you before you sign up.
An Individual Voluntary Arrangement (IVA) can be a good debt solution for some people but it is a long-term formal legal contract which may not have been clearly explained at the start. Or you may not have focussed on some of the detailed points, which didn’t seem important.
To answer this reader’s question, I’ll look at why the IVA firm wants your banking statements, why you do have to supply these and whether this includes giving them your personal banking details.
When and why does an IVA firm want your bank statements?
In an IVA you agree to pay what you can afford to your creditors each month. Your IVA firm has set an initial monthly amount, but if your income rises or your expenses drop, that amount will be increased.
That is why almost all IVA firms ask for your bank statements at the start. They want to see what your income, rent/mortgage, council tax, insurance costs etc are.
Many firms ask for bank statements or payslips for your annual IVA reviews, to see if your monthly payments should be changed. And most will ask for them for the final “closing review”. Some IVA firms mainly use these to check your income. Some look in more detail.
This may feel intrusive but it is just part of an IVA. In practice, if you are spending £30 more on cigarettes and £30 less on food than the Income & Expenditure sheet that was drawn up at the start said, your IVA firm is unlikely to care.
Do you have to provide these statements?
Yes. See this clause in the 2016 Protocol:
8(2) You promise to give the Supervisor whatever type of accounts or details (or both) of your income and expenditure relating to your affairs, for whatever date and period, as the Supervisor may reasonably require.
Your IVA may not use those exact words but there will be an equivalent, sometimes the broad do all such things as the Supervisor reasonably requires.
The IVA firm has to verify your income and expenditure and asking for bank statements is a reasonable way to do this.
Do you have to provide online banking login details to an IVA firm?
This sort of request is new in 2017 as the technology to utilise the information is just starting to be used. Creditfix has several thousand of its customers signed up to it.
You do NOT have to do this. You have to provide the information in your bank statements, but this can be paper statements if you want.
But there are advantages for you in using this sort of technology to supply the information to your IVA firm:
- you don’t have to bother with physical bank statements (many people don’t get these anymore) or completing a form;
- nothing can get lost in the post;
- it should be much faster for your IVA firm to analyse the date and complete your review.
So, as they will be convenient for you as well as your IVA firm, have a look at exactly how the IVA firm is proposing to access your bank accounts. If this feels safe and secure enough to you, it may be worth it.
How secure is this?
If they are asking for your banking username and password to be given to them on the phone, by email or letter I suggest you tell them to get lost. You should never ever do that.
I don’t think they will be asking for that. Creditfix, which is asking a lot of its customers to give them online access to bank accounts, certainly isn’t.
It is much more likely that you will type in your details into a secure application which then downloads your banking details through a process known as screen scraping. In this case, your IVA firm is not going to keep your login details in its files so they can’t be lost in a data breach and it is impossible for an employee to steal your details.
Banks say screen scraping is insecure, see Banking Association calls for end of ‘screen-scraping’. The banks want to restrict access to your data so it has to go through their own applications. But is this really a security issue? I am not aware of any case where a customer has lost any money because of it… and it would put a lot of the banks’ new competitors out of business… it feels a lot like big banks trying to protect their profits.
I recently reviewed a couple of savings apps that use screen scraping: Chip and Plum. I am happy enough with the security to use them myself and I think many people will be, but this is your decision. If you aren’t sure, here are some questions to ask your IVA firm:
- how long will you keep my login details?
- who will be able to see them?
- are you using a technical services provider, if so, are they FCA-authorised?
- are there any circumstances in which you will pass my login details or the details of my bank account transactions to anyone else?
So do you have to hand over your banking details?
As part of your IVA, you have agreed to supply your IVA firm with details of your income and expenditure. Bank statements are a convenient way to do this.
You can refuse to supply your online bank account login details and instead send bank statements to your IVA firm. But there are advantages in using this new technology, so don’t automatically reject it. Have a look at the security aspects and ask your IVA firm if you need to know more details.
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Mark says
I was in an IVA and have never heard of this! I most certainly think not but you can print off statements or print screen shot your statements to send. I would not give anyone your login details regardless who.
Ian mcintyre says
You breach your banking rules if you disclose your details and passwords etc so I think not. I would report this request to the authorities.
JoeEasedale says
Ian is correct. You will have breached your banking covenant if you supply logon details to any third party. If the bank finds out then they will wash their hands of you if there is any fraud claim on their account. They will not make good any losses you may incur and are likely to close your account for putting the bank at risk. It is hard enough to open an account if you are in an IVA. Try living on cash only!
Sara (Debt Camel) says
I know that is the position in theory, but I haven’t heard of it being applied to anyone in practice who uses a screen scraping app.
It’s not hard to open a bank account when you are in an IVA – all the major banks will let you have a basic bank account.
Miles says
It was quite a shock to me to be told you also have to enter your council tax as a debt, which creates all sorts of additional problems which didn’t exist previous to the IVA
You might want to make a seperate blog for that
Sara (Debt Camel) says
What sort of extra problems? I wrote this a couple of years ago: https://debtcamel.co.uk/council-tax-insolvency/.
jim says
Good, sensible article after a very alarming headline!
As an IP, believe me, I wouldn’t want a client’s online banking details unless I knew they were 100% secure.
Karma Kommando says
Why is this even a question? NEVER EVER give your banking log-in details to anyone! Read the Ts + Cs in your banking agreement.
Karma Kommando says
Update – this is all part of the Open Banking thing which is being rolled out. An excellent resume of this can be found on MSE
https://www.moneysavingexpert.com/banking/open-banking
Further research shows that Creditfix use Castlight’s “CAAS” API rather than a screen-scraping technology
https://castlightfinancial.com/our-products/categorisation-as-a-service/
Technically, I believe an API is safer than screen-scraping and you appear to be covered for any resulting fraud.
However I shan’t be rushing to use it.
Just thought this would be of interest.
x KK
Sara (Debt Camel) says
This article was written more than 6 months ago and at the time Open Banking didn’t exist. Personally I prefer my article on Open Banking https://debtcamel.co.uk/open-banking/.
APIs are not an alternative to screen scraping – many APIs use screen scraping. Some of them are changing over to use Open Banking now that is available – Open Banking is much more secure.
Lisa says
I’m starting to worry about my first annual review next month. How much detail will they go into? It’s been a tough year with a few car problems and though I switched gas and electric it hasnt helped much.
Sara (Debt Camel) says
It’s often pretty quick, just a check to see if you have earned more so they can increase your monthly payments… If any of your expenses have gone up a lot, this would be a good point to tell your IVA firm, especially if your income has as well.
Basically if it has been tough but manageable, then fine, but if you don’t think you are likely to get through the next year, you should read https://debtcamel.co.uk/cant-afford-iva-payments/ and discuss your problems with your IVA firm.
I’ve written a much longer response here: https://debtcamel.co.uk/iva-annual-review/.
Mian says
My IVA is about to comlete in coming 9th months, and last three consecutive years I have been asked by Creditfix to use some kind of link to login to my bank accounts so they could download my statements. Though they got the access to my accounts to download my bank statements but I never give them my login credentials directly. I dont know what was the technical background of that process but yes I have done that, and so far nothing weird happened to my Bank accounts. I am just qondering that what will happen when I pay my last payment in Aug 2020? will they ask me again for this?
Sara (Debt Camel) says
After your last payment Creditfix will do a final review. They will probably want to access your bank account again for this. See https://debtcamel.co.uk/end-of-iva/ for mire about egat happens when you have finished paying.
jeff says
when enquiring about an i v a i was quoted a payment plan of £100.00 per month for 5 years.a relative has agreed to help me.is it possible to make a one off payment of £6000.00.which is 60 payments of £100.00.
Sara (Debt Camel) says
how large are your debts? have you already defaulted on them? do you have a house with equity? Are you in work> Sorry you need to give a lot more information about your situation.