Quality Insolvency Services (QIS) went into administration on 23 November 2022.
They are one of the larger IVA firms. It is estimated that there may be about 13,500 IVAs currently in progress at QIS and they were 5th in the Insolvency Service’s table of IVAs registered in 2021:
| 1 | Creditfix | 17,758 | 21.90% |
| 2 | The Insolvency Group | 10,962 | 13.5% |
| 3 | Hanover Insolvency | 9,099 | 11.2% |
| 4 | Financial Support Systems | 6,520 | 8.0% |
| 5 | Quality Insolvency | 5,987 | 7.4% |
| 6 | McCambridge Duffy | 2,976 | 3.7% |
| 7 | Payplan | 2,850 | 3.5% |
| 8 | The IVA Advisor | 2,822 | 3.5% |
| 9 | Debt Movement | 2,738 | 3.4% |
| 10 | Logan Whyte | 2,391 | 2.9% |
Contents
What happens to your QIS IVA?
Your QIS IVA is still continuing. The administration doesn’t cancel or change it:
- the terms of your IVA are unchanged;
- you should carry on making monthly payments to it.
The money that you have paid to your IVA already that will go to your creditors should be ring-fenced in a separate account. It is not part of the assets of QIS so it will not be affected by the administration.
You can still contact QIS in the normal way if you have any queries.
If your monthly payments are no longer affordable, contact QIS to get them reduced. IVA firms now have much greater flexibilty to reduce payments because of cost of living problems. If you can’t get a response, talk to your local Citizens Advice to get help.
It will be some weeks before the administrators publish their proposals, but it would be normal for the administrators to sell all the IVAs to another IVA firm. You cannot object to who your IVA is sold to or ask for your IVA to go to a different IVA firm.
After this sale, your IVA will continue with the same terms and conditions. If the new firm wants to change them, then you have to agree to that.
The IVA Advisor went under in August
QIS is the second firm in the top 10 list to fail this year. In August The IVA Adviser (TIA) went into administration.
The administrators’ proposals were published in October, so by now we know more details about this one. In August TIA had 8,500 open IVA cases and employed 48 staff in the UK.
An investor called Balbec had advanced the astonishing sum of £26m to TIA over a period of just over a year. The administrators say:
The funding has primarily been used to purchase IVA cases from lead generators.
The proposals said that:
The IVA book will be transferred to an alternative provider in due course, a transition process is underway and it is anticipated that the IVA book will transition mid-October 2022.
This has now happened – TIA’s IVAs have been bought by Anchorage Chambers, who were 14th on the list of firms registering IVAs in 2021. Anchorage’s website now says:
We are delighted to welcome the clients of The IVA Advisor. The terms of your IVA proposal have not changed and if you have already set up your monthly payments no further action is required. If you wish to make a payment please click on the online payments button – please use your newly allocated client reference number.
Why are these IVA firm failures happening?
You might think IVAs are a growth industry at the moment:
- there are many more people in financial difficulty in 2022;
- personal insolvencies have increased by nearly 50% since 2014;
- IVAs are now taking an increasing share of personal insolvency. Ten years ago IVAs were less than 50% of personal insolvency, now they are about 75%.
Also IVA fees are notoriously expensive.
So how can a large IVA firm not be doing well?
Increasing expenses
Very high fees are being paid to lead generators. The FCA found in 2021 that the average fee being paid to an FCA-authorised lead generator was £930. There are anecdotal reports this year of fees of over £1,200 being paid.
Another key point is that many people with IVAs are being badly affected by the cost of living crisis. People will be missing payments and asking about reductions in payments or payment breaks. This will increases the IVA firm’s admin costs and, if IVA s fail, may reduce their fee income.
To increase efficiency, many firms have outsourced much or all of their IVA administration function abroad, but this leads them exposed to hikes in charges from these third party firms, who may also provide services for their competitors.
The fixed fee model
Most large IVA firms have adopted the “fixed fee” model. This results in IVA fees being paid more slowly and the creditors getting some money earlier in the life of an IVA.
In theory, this should disincentivise IVA mis-selling as the IVA firm will want the IVAs to continue for longer to get its fees paid. But when combined with the high up-front lead generator fees, it creates a huge cash flow problem for IVA firms especially if they are trying to expand.
The solution often adopted is by getting an investor to advance the discounted value of the future fee flow when an IVA is registered.
This weakens the incentive not to mis-sell. Of course, it’s still there as the business will have major problems in the medium/long term if the fee income doesn’t arrive. But in the short term, the answer to looming cash flow problems may look like registering as many IVAs as soon possible and getting the cash advance from the investor.
IVA firms aren’t regulated
These cash flow problems would matter less if IVA firms were well capitalised. But many of them aren’t, as a look at QIS’s last published accounts shows.
One of the reasons for this is that the firms themselves are not regulated, only the Insolvency Practitioners are. So there are no checks by anyone that firms dealing with thousands of customers, many of them vulnerable, are financially stable.
There may be more failures
Investors want to see a return on their money. Balbec will lose money on its TIA investment. The same may happen with QIS – we will know more when the administrators’ proposals are published.
Investors may be less likely to fund other IVA firms, or charge more for it, after these failures. If this happens, it will increase instability.
And if there are more failures, which IVA firms will want to buy the books of a failed one, especially if it is large?
Why this matters for people with IVAs
It may sound as though being transferred to a different IVA firm with your IVA continuing on the same terms is not a problem. I hope it turns out well for people with TIA or QIS IVAs.
But the history of many previous transfers is that they can create significant communications problems. People report that emails are ignored, or customer service staff are unhelpful and don’t seem able to see details of what was previously discussed with the old firm.
A regular on IVA forums who posts as Foggy says:
I find it egregious that those in an IVA have, effectively, no voice once they are ‘hooked’…Those in financial difficulties should not be left as helpless pawns in these chess games between the insolvency world oligarchs!
To make things worse, these transfers can happen several times. For many people with Aperture IVAs that were transferred to Debt Movement in 2020 that was the second or even third time their IVA had been sold.
Peter Wordsworth, Head of Insolvency Services at Stepchange says;
The recent collapse of two firms should act as a reminder that it’s IVA clients who risk suffering the fallout of instability in a sector that has, in recent years, seen some firms borrowing heavily to fund rapid growth. There is currently no formal mechanism for ensuring that clients of failed firms receive “safe harbour” for the remainder of their IVA if they are transferred to another provider. It would be helpful if the Insolvency Service intervened in these situations to ensure that the interests of clients are properly recognised and protected.
StepChange’s mass IVA variation
Personal insolvency – the need for change
Changes for Aperture & Vanguard IVAs
Timmy says
A client told me yesterday she had started an IVA with this troop of clowns in March. Looking at the appalling mis-selling in her case, I am not at all surprised they have gone under. They had calculated she had just over £80 per month in disposable income. Conveniently perhaps, this meant they could justify not advising a DRO. The reason she chose an IVA over bankruptcy was that she couldn’t get the money upfront for it (this is in black and white on the IVA paperwork) – they didn’t think to mention that she could have paid the fees in instalments. Total payments to the IVA: £5,200. Total fees to QIS: £3,650. Sadly this is typical of what I am seeing every week with our (social housing) tenants at the moment.
In fact the £80 figure was based on a mistake about the Council Tax liability – disposable income drops to £15 once that is factored in. I can understand why the IVA farmers are keen to pass on these cases that are obviously going to fail, but I can’t see why the IVA companies are letting absolutely hopeless cases go through. I suppose they’re hoping that the marks are going to stick to the payments for long enough to give them some profit before it gets too much. But it’s all going to come tumbling down sooner or later.
I think it is shameful that the government hasn’t imposed proper regulation on this sector.
Sara (Debt Camel) says
“I suppose they’re hoping that the marks are going to stick to the payments for long enough to give them some profit before it gets too much.”
yes, I think so. Many people are desperate not to let the IVA fail and will borrow from family to keep up payments or to put forward a settlement offer.
And of course another sort of IVA mis-selling is nicely profitable for the IVA firm – those people who did not need a form of insolvency at all, may have needed a short term DMP. Not the clients the free sector sees, but they are the victoms of this racket as well. As are the creditors in this case.
Gill says
I had a pending DRO client who just signed up with QIS in October. Pretty sure he did it through a lead generator. £70 a month. He’s on UC and homeless (in a hostel). They told him that, because he was looking for work, a DRO would fail if he got a job. He doesn’t yet have a job and due to his poor mental health may not have one for a while yet. Even if he did, the cost of living would have had an impact on any disposable income. I was just starting to gather information for a DRO when he suddenly advised he was now in an IVA. If he’d asked me first…
Sadly he doesn’t seem interested in being helped to make a complaint but, unless he leaps into a job, I doubt he’ll be able to pay it for long, if at all. This news presumably makes any future complaint more difficult in terms of communication, too. Sigh.
Sara (Debt Camel) says
deep sigh.
David says
I have recently moved to a DRO from an IVA. After three years with my IVA. I was surprised how realistic expenses are calculated to enable the criteria to have this accepted. I was never happy with the IVA for a number of reasons. Firstly, the pittance the creditors are going to receive. Why would they accept such small amounts. Secondly, the fees taken by the IVA company. Is it that complicated to administer after the initial set up, and then apart from checking payments being made, and the odd query from a debtor, what else? A debt management plan does not have these huge costs and operates in the same manner, albeit that the creditor receives far more in return. Thirdly, the lead generators are paid far to much and there are no lead generators for DROs, or DMPs or even bankruptcy. Why are they needed? Fourthly, I was lead generated although I believed it was the actual IVA company that I eventually ended up with. In my experience the lead generator people rushed through my expenses and before I knew it I had a figure for an IVA payment and was on my way. As I say I am very sceptical of IVAs as though a DRO provides nothing for creditors. An IVA provides a good income for the lead generators and the Insolvency Practitioners and leaves the debtor with no guarantee of peace of mind
Sara (Debt Camel) says
In my experience the lead generator people rushed through my expenses and before I knew it I had a figure for an IVA payment and was on my way.
And there is often pressure to sign up quickly. No one sells DROs or bankruptcy – a good debt adviser will explain what happens and the pros and cons and leave the decision up to you. But an IVA is not a debt advice process, it is a sales process, because of the fees involved.
Liam says
History repeating itself here.
QIS have history, with owners that continually take, rinse, cleanse, repeat.
Good riddance, although no doubt it’s owners will be found to be doing more damage to the IVA market in the months ahead.
James says
Already pre-packed.
All the lead gen domain names and websites are back up live registered as Clear Path Insolvency Limited.
Interestingly the IP for Clear Path is still Adam Boys exactly as it was for QIS.
Companies House search shows Director of Clear Path Insolvency Limited is Rio Quinlivan-Grech, son of Claudio Michael Grech (Director of QIS), and previously Swift Insolvency Solutions which also which went into liquidation then passed it’s assets over to QIS.
Quick search on https://web.archive.org/ shows full ownership on footers.
Take, rinse, cleanse, repeat
Julie says
I have a client whose IVA with QIS has recently failed. And we have been told that the termination will take 2-3 months. He is then looking at making an application for a DRO. Do you have any comments or advice on how this will affect this process?
Sara (Debt Camel) says
Does he have urgent priority debts?
Julie says
He has Council Tax in the IVA. And fuel arrears not in the IVA so more recent. He also has a Magistrates’ Court Fine, for which he has a means hearing today, but obviously not included in the IVA.
Sara (Debt Camel) says
To answer your question, in theory administration should make no difference to the administration of current IVAs. In practice it may be harder to get decisions made and I would worry that the administrators may prefer to leave some stuff to be handled by the firm that buys the IVA book which may be several months.
Does this matter for your client, apart from a natural desire to get this all over and sorted? After a magistrate’s court fine they may well be in a negative budget… The council tax can just wait, there is even the possible advantage of including next years CT in a DRO if this is dragged out to June. So the big problem may be the energy arrears and preventing a prepayment meter being fitted.
Watchdog says
https://www.thegazette.co.uk/notice/4226206
Sara (Debt Camel) says
thanks for sharing that!
Watchdog says
Creditors should look into this as possibly millions owed back to IVA estates for category 2 expenses in breach of SIP9 after recent judgement against related parties.
#Vanguard ruling
Sara (Debt Camel) says
Do you have a link to that?
Watchdog says
https://insolvency-practitioners.org.uk/regulatory-notices-2021/
25th March 2021
Tony Davies says
This article is well written and makes a lot of sense, but to see the biggest mis-sellers in the industry continually bleating on about doing whats right for the clients is laughable. Stepchange are at the point of becoming a parody of themselves.
Undoubtedly they help a lot of people a year, but an audit of them would reveal mass misselling to orchestrate a huge dmp book to keep the donations coming in yearly.
I noticed theyve recently lost the dro tendor, most likely as whoever you referred into them almost always called back to say they were told they couldnt do it for them, despite being a nailed on candidate, if its not a £80 dmp upwards they aren’t interested.
I’m always amazed when the ceo sticks his head out of the sand to make a quote with what they have going on in house.
Paul H says
late to the party with this comment, and the only reason i have found that Qis are in the trouble they are is because i had to go to their website to upload some documentation. So I’m just about to start my second year of payments, the original payment i will say was rather small in comparison to what disposable income i had. The idea of grabbing all my debts locking them into a deal and paying 1 company 1 amount a month seemed ideal, especially as it runs for 5 years and the end. Now if my IVA is transferred which is more than likely or already has been done, what happens if they say that my payments need to be doubled or more, yes i understand i owe the money anyway, but have i been engaged into the contract by false representation of what my affordability is and happy to agree to the terms and conditions, only to have my review of my affordability repayments to become greater than privately agreeing a repayment structure myself with those i owe money to. Also one part of the debt was to amigo, Qis appointed someone to deal with this on my behalf in the claim of miss selling, will that claim fail now.
Sara (Debt Camel) says
Did the firm you first contacted tell you exactly what to say to QIS?
Paul says
I contacted qis directly, for my iva. Funnily enough I have read back through all the contact and my iva was signed off with fresh start insolvency.
Sara (Debt Camel) says
So did QIS tell you what to say to Fresh Start? Did they suggest your income should be lower or your expenses higher?
Oliver says
I wanted to give my experience on this specific matter about suggesting income lower/expenses higher.
I started my IVA with QiS April 2022 (lead generator got me there iirc). I spoke to a Nyomi on the phone who asking about my monthly income and expenditure. I told her I was paid weekly so should I multiply that by 52 and divide by twelve for my monthly income amount, but instead she said to just use the past 4 weeks (which over the course of the year would be about 8% less than I would actually earn). After telling her my monthly outgoings which would have left around £650 spare income, she added on over £200 of travel expenses, £250 of food expenses, and £90 of misc expenses that didn’t exist to “prove” I had only £110 I could afford to repay creditors.
I was told repeatedly “I can’t tell you the right choice you have to make that decision yourself” but she certainly talked about IVA’s almost exclusively other suitable routes I could take.
They are frauds. I am thinking of failing my IVA, provided that my offer to the creditors of 45p/£ lump settlement instead of the 40p/£ they are currently receiving via the IVA, as a family member has offered to do this for me. I am coming up to my first annual review and am wondering if this is allowed/a good idea or not. Thanks
Sara (Debt Camel) says
So is it fair to say that you could have actually managed to carry on paying your debts without the IVA?
Oliver says
My 3 debts (£8,500) had been sold on to 2 collection agencies. I had ran away from paying them for years (defaulted in 2018 on all 3 as I was at uni and couldn’t afford it) until they caught up to me when I finally moved out of my dads house and had to register at a new address. The letters came flooding in and I looked online for a solution, I stupidly and rashly entered an IVA after not reading the document fully, I was being called and pressured by QiS to sign so that the creditors meeting could take place. I take most of the blame for this, but also feel conned by them. My expenses are much higher now as I went from cohabiting to living alone, but I can still afford the £110 monthly payment atm. Dreading the annual review as my earnings for the year will be about 15-20% higher than initially stated after sporadic overtime and initial mispresenting of my income (both mine and the advisors fault, but again mostly mine). I just wanted this problem to be solved after all these years, and now I feel I have made it worse.
Sara (Debt Camel) says
ok so your income is higher but your expenses have also been higher to. Write down all bills and groceries, petrol etc that have gone up during this year. And during the review push for those to be taken into account.
if you may a settlement offer now, the IVA firm will usually want to do a review of your situation first, so it may be easier to get threough the first year review and then offer a settlement.
Kimberley says
Hi I’ve entered into this qis, iva since 2020 and make monthly payments of £92 for old debts that added up so I’ve just received a load of letters from lowell telling me my accounts had been returned to them and I now have ccjs and my bills have never been paid by qis is this all a scam have I paid these people for no reason??? Please can someone tell me if I should carry on with my payments or should I get my bank to try and get all my Money back I’m so confused as when I phoned them they are just saying nothings changed and your iva is with fresh start and everything is fine keep making payments you only have r two years left am I being scammed ???
Sara (Debt Camel) says
These CCJs are for debts that were listed in your IVA?
b says
Looks like administration has finished and IVAs have been transferred to Fresh Start Insolvency Ltd. Not that they bothered to let any of us know.
I had an IVA set up with QIS since 2020 and can echo the comments by others, being encouraged into an IVA (when now I know that a DMP would’ve been so much better for me), and also encouraging me to over-report my expenses when creating an I/E document.
They’ve constantly been poor at communication, and I have so much regret around entering the IVA in the first place.
I’ve actually been trying to leave my IVA since Dec 2022, it took me over 2 weeks for them to acknowledge my letter or answer the phone, and as of today I’m still waiting for a certificate of termination. As I’ve now missed (intentionally) 3 payments, I’m hoping this will be expedited. My financial situation has drastically improved and I have the funds to pay off most of my debts – but my creditors won’t let me pay them until I have the certificate!
These lot are clowns, good riddance.
Emma says
I have an IVA with Hanover, and there is something fishy going on there. I had communication with them last month about a settlement offer from a family member and their email address has creditfix attached to it. The lady I was dealing with communicated on another email address. Those to email addresses plus the one I had usually used now keep returning as invalid addresses! Ridiculous. Customer support are ignoring. I’ve managed to dig deep to find an escalation address but I’m not holding my breath. I wonder if they are being taken over. But it’s not good enough. I see that their practitioners have been sanctioned recently. It does not bode well, and I don’t feel confident about my situation with them.
Sara (Debt Camel) says
Hanover has stopped doing new IVAs, it is effectively being run down until the current IVAs close. There back office arrangements are now being effectively run by Creditfix. If your escalation address doesn’t get your issue sorted, come back and i will give you a creditfix address to contact.
David says
I had an IVA with Hanover started May 2019. I was never really happy and have no confidence in IVA s. The companies take the majority of your payments and the creditors seem to receive a pittance. Anyway October 2022 I cancelled the IVA and entered a DRO. This means the creditors get nothing back and everything is settled within 12 months and one can proceed with life starting a fresh from day one. Hanover keep asking me for my monthly payment and also now in May requesting a review of said cancelled IVA. By text and email. I have asked them numerous times to stop by email, having only last Friday sent 30 emails in one day hoping this would stir a response. Saturday I received another request to complete a review. I have phoned their offices but I am told to call another number as the original is not valid anymore. I did not call this new number as I guess now from Sarah’s comment that it is all now with Creditfix. This whole IVA scheme has been a terrible idea from the point of view of the Creditor and debtor. Hanover’s people seem to have received the wrath of the people that police them on a number of times over the years. So I feel my distrust of these IVAs has been born out. Going forward at age 74 I am grateful that this whole saga for me has been dealt with and I certainly shall not be taking credit again after my DRO is completed.
Sara (Debt Camel) says
Who set up your DRO? Because it shouldn’t be possible to start a DRO if you still have a IVA that hasn’t failed.
Sharyn says
When did Creditfix take over Hanover? I have been with them since 2019 and haven’t received any communication to say anything was changing – then again, I dont ever get a response from them when I do email requesting an updated balance statement! My IVA is due to finish Mar’24 so should I contact the Creditfix about this?
Sara (Debt Camel) says
This is what the Hanover website says: https://hanoverinsolvency.co.uk/ “Existing customers have been notified of any changes to their arrangements”
My understanding was that these cases were now being administered by Creditfix. But if you havent been told anything i suggest you ring the number on the Hanover website.