On 13 May 2022, the Insolvency Service announced that Vanguard Insolvency had been wound up “in the public interest”.
Vanguard set up and ran Individual Voluntary Arrangements (IVAs). These are long-term agreements between a customer and their creditors that are increasingly criticised as being mis-sold to vulnerable customers.
However, Vanguard has not been shut down for mis-selling IVAs, but for abuse of fees.
This article looks at this Vanguard announcement, a previous IVA fee scandal involving Creditfix, and why IVA regulation needs to be changed urgently.
Contents
Insolvency Service investigation
IVA firms are allowed to charge certain fees and claim for certain expenses they incur while running IVAs.
The Insolvency Service said:
Following complaints about Vanguard’s practices … the Insolvency Service launched confidential enquiries before investigators uncovered serial abuse of the payments made by Vanguard’s customers.
Vanguard used third party firms to help it administer IVAs and claim customers’ assets, for example by applying for PPI refunds.
Between August 2018 and June 2020, Vanguard paid about £9million to these third party firms.
But some of these third parties had an arrangement to share the fees they were paid by Vanguard with two other firms, MDN Consultancy and KIS Financial Consultancy. Both these firms, which have also been wound up by the court, were connected to Vanguard through personal or family relationships.
The Insolvency Service investigators found that Vanguard’s practices “lacked transparency”.
The Insolvency Service said:
The Judge commented that it was of particular concern that the director of Vanguard seemed incapable of seeing anything wrong in the company’s failure to disclose to creditors and debtors the mechanism that was used to pay money from the IVA estates, effectively for the benefit of himself and his companies.
Shocking for such a large IVA firm
In April 2020, Vanguard had more than 14,000 open IVAs.
Insolvency Service statistics show that it had been one of the top ten IVA firms for several years:
- 2018 – 6th largest
- 2019 – 5th largest
- 2020 – 9th largest.
For the Insolvency Service to describe such a major player as “a rogue firm” is shocking.
Vanguard’s customers and their IVAs
In August 2020, the administration of all Vanguard IVAs was transferred to Ebene Gate, a Creditfix group subsidiary that operates out of Mauritius.
There have been various criticisms of Ebene Gate on forums including that they have tried to make Vanguard customers pay by recurring card payments, rather than direct debits or standing orders.
The Insolvency Service says customers who were sold an IVA by Vanguard should not be affected by this announcement. And that they should contact Oakfield with any queries:
- the Ebene Gate Phone Number is: 0141 218 4816
- the Ebene Gate email is: customer@ebenegate.co.uk
IVAs belong not to the firm that sets them up, but to the Insolvency Practioner (IP) named on the IVA.
The Insolvency Service announcement said the Vanguard IP did not properly explain to Vanguard customers what their fees were being used for, but it didn’t name him.
Vanguard’s IP was Peter Jackson, who is regulated by the Insolvency Practitioners Association. In August 2020 Jackson switched from working for Vanguard Insolvency to Oakfield. Jackson moved on again in January 2022 and now works for The IVA Advisor.
At some point the IP on these IVAs was changed from Peter Jackson to Tim Pope – his email is tim.pope@ebenegate.co.uk
IVA fees – who loses out?
It seems that the purpose of the fee arrangements was to allow Vanguard to benefit from higher fees, so someone has paid more fees than they should. So who has paid these fees?
IVA fees and disbursements are taken out of the payments a customer makes. This reduces the money that is distributed to the creditors. It is usually the creditors who lose out if the IVA fees and disbursements are too high.
But, as I argued when Creditfix were trying to increase their fees, there are some situations where the IVA fees paid may matter to the customers: where there are joint debts in an IVA; if an IVA fails and you owe money for fees; when you pay off your IVA in full; or if you want to settle your IVA early.
If you were a Vanguard customer and you are wondering if you have lost out, you could start by asking Tim Pope to explain what happened and then consider making a complaint. But IVA complaints are themselves a non-transparent process and you may find it hard to get anywhere.
A previous IVA fee scandal – Creditfix
The RBS v Munikwa et anor judgment was given in April 2020. Early in the first lockdown, this may have received less attention than it would otherwise.
RBS was unhappy with the fee structure in the IVA and with the approach adopted by the Creditfix IP in the approval of the IVAs. 8 IVAs were looked at in detail but the judgment said that RBS’s complaints were replicated in 1,098 cases between April and mid-August 2019.
In these IVAs, RBS voted to accept the IVA proposal being put forward by Creditfix provided that the customer agreed to accept the modifications that RBS proposed which changed the fee structure.
An IVA is approved by creditors’ voting. Creditors don’t actually attend a physical meetings – they give the chair of the meeting a proxy to vote on their behalf as the creditor directs. The chair of the meeting is the IP, or someone appointed by them – in these cases a Creditfix employee.
RBS said it would only vote in favour if the modifications were accepted by the customer. They were not accepted by the customers, but the Chair used its proxy to vote in favor of the unamended proposal, contrary to the proxy instruction.
The judge described Creditfix’s belief in its fixed fee structure as “evangelistic”. Creditfix claimed it would lead to lower fees, but in 7 of the 8 IVAs under consideration, RBS’s modifications would result in lower fees.
The judge found that:
Plainly there has been a material irregularity; and that has been brought about by Creditfix’s promotion of its own interests.
2022 – IVA reform is urgently needed
That a large IVA provider such as Vanguard has been closed down “in the public interest” suggests a major failure in regulation.
From a debt adviser’s point of view, issues about IVA fees may seem less important than the problem of IVA misselling to customers who have better debt solutions available:
- about a third of IVAs are failing at the moment, leaving customers back with their debts and a wrecked credit record. In many cases it seems that a Debt Relief Order or bankruptcy would have been a more appropriate debt option;
- other IVAs complete but the customer may have paid much more than they anticipated and, in some cases, a debt management plan would have been better.
But IVA fees are at the heart of the IVA misselling. The IVA proposed for Mr Munikwa, set out in the judgment above, demonstrates how large these fees are and how little the creditors actually receive:
- total debts of £11,048, proposed monthly payments of £85 for 5 years – a total contribution of £5,100
- of this £5,100, only £1,450 would be paid to the creditors, the rest went on IVA fees.
The Insolvency Service has consulted on reforming insolvency regulation, but that applies to corporate as well as personal insolvency and changes aren’t likely to happen soon.
We can’t wait for this – the problems associated with IVAs are more urgent than that.
UPDATE the IS started consulting on the reform of Personal Insolvency in July 2022. My response is here: Personal Insolvency – the urgent need for change.
More than a third of IVAs fail
Lower IVA payments because of inflation
Could a Debt Relief Order help you?
Issy says
This really doesn’t surprise me , if all these IVA firms were looked into they would find they are all the same , think it’s time they were all stopped with all these ridiculous fees
Clare says
What is going on with Debt Free Direct as I had an IVA with them over 8 years ago and shouldn’t of been given it? Can I do anything? Hope you can advise.
Sara (Debt Camel) says
it is hard to make any claim for IVA mis-selling, and in your case I suspect it was impossible. DFD closed down and their IVAs were transferred to Aperture.
Chris says
What’s a better thing to use rather than an IVA?
Debt relief order?
Debt Management Plan?
Sara (Debt Camel) says
This depends on your situation.
IVAs are sometimes a very good option.
Can you say a bit:
– are you renting or buying?
– total amount of your debts
– do you own a car or have one on car finances, if yes, how much is the car worth?
– have you defaulted on your debts? If you haven’t, is this imminent as the payments are unaffordable?
– are you getting any benefits?
– is your situation likely to change for the better or worse in the next couple of years?
Milo says
We had a trouble free IVA until year 5.
I say trouble free, but of course we had all the troubles an IVA brings. Never any holidays, can’t improve house or furniture. No luxuries. Shopping was a nightmare because your only allowed £330 I think it is for a couple, but we soldiered on because we wanted to live in the future without debt.
Then 5th year, all hell broke loose with the IVA firm wanting Equity Release or rather a secured loan. We are still trying to fight this, but if we fail, they make us have a secured loan for £3,000 to give to the creditors. I mean it could have been much worse if we had been able to afford a remortgage, then they could have potentially had £40,000 from Equity Release.
All the same, the whole point of us having an IVA was to get out of debt within 6 years, but we will be another 3 years of debt now by the looks of it. I feel such an idiot having wasted 5 years scrimping and saving!
Sara (Debt Camel) says
A secured loan for 3,000? That is very low. What interest rate and what term are you being quoted?
There is unusally a “de minimis” clause in an IVA and if you cant release more the £5,000 you have to pay an extra years payments instead.
What are your current IVA payments?
Is your mortgage fixed or variable rate?
Tim Pope says
As per the Insolvency Service Press Release (see below); Customers who have IVAs that were set up under Vanguard do not need to worry and their arrangements will continue as agreed. These were transferred to Oakfield nearly 2 years ago and are now under my Supervision with the support of Ebene Gate, a managed service provider. If customers do have any concerns or questions then please contact my team at customer@ebenegate.co.uk or myself directly at tim.pope@ebenegate.co.uk
The winding up petitions have not affected the position of any of the IVAs previously under Vanguard’s control. These were taken on by another provider some time ago and consumers should continue to make payments in accordance with the terms of their agreement. Any customers who are concerned should get in touch with their IVA provider in the usual way. (www.gov.uk)
Kind Regards
Tim
Paul says
Hi Tim
I have contacted you by email regarding my vanguard – now ebengate Iva
I am getting no response from ebengste regarding
Yearly statements etc etc
Thank you
Foggy says
According to the Insolvency Service listings, A Mr Pope is also trading as TJP Insolvencies. Searches on TJP Insolvencies lead back to UK Debt Advice and UK Debt Advice ratings on Trustpilot refer to Creditfix. This is one unholy mess !
Nancy says
There should be a complete forensic investigation into Creditfix and its practices. As an ex-employee I know that they kept secret their own telesales team who were onsite during insolvency assessments. The teams are all coached to say the right things on calls and very little training is given.
Its ran like a sales function rather than a support. Morally bankrupt….
Andy says
Sara
Many thanks for writing this article as it touches on a subject of which I have only recently become aware; Fees charged by IVA firms.
I’m helping someone with an IVA and am concerned about the disbursements that they are being asked to pay, which, to my mind, are nothing short of egregious.
In the article you wrote that “IVA firms are allowed to charge certain fees and claim for certain expenses they incur while running IVAs”. This implies that there are fees and expenses for which IVA firms *cannot* charge. Is there a list anywhere of the fees and expenses for which IVA firms *are* allowed to charge, or failing that, a legal definition of what is chargeable?
Does the person with the IVA have any right to proof that the cost was actually incurred and was incurred for the benefit of that person or am I misunderstanding things?
Sara (Debt Camel) says
The expenses may be outrageous, but it may not benefit the person with the IVA to challenge these – what are you hoping to achieve?
Andy says
I’m currently trying to get an accurate picture of the financial state of the IVA. The people I’m helping want out of it and obviously one option is to make a full and final offer that includes at least some of the “disbursements”. But you’re right – challenging them may not be the way forward. Its difficult to tell though when the firm are so evasive and have not supplied a statement in the four years that the IVA has run. They still haven’t despite a written request followed by a subject access request that specifically asks for them. (The deadline for the SAR has now expired).
In respect of the fees I don’t think they can have any quarrel with the Supervisor or Nominee fee, although I’ve also seen two different values for the supervisor fee which is sometimes claimed to be ex VAT sometimes inclusive. The “disbursements” however are potentially a different matter. I’ve seen three different outcome statements each of which lists the same “disbursements” but with different amounts each time.
Most of the information I need is readily available via Google but finding a definitive guide to chargeable expenses and disbursements is proving difficult. I thought perhaps you might know of one
Sara (Debt Camel) says
I don’t know of a definitive guide. My instinct says this is a red herring for you. By the time you manage to get something useful (if you ever do) the IVA may be nearly finished…
I suggest you read https://debtcamel.co.uk/iva-settlement/ and decide if they are in case 1 or case 2.
Daniel says
Iv had a iva for almost 4years, and about 2years ago ebengate, took over, from vanguard. are they legit, all I get is letters off, debt mangers. Asking for money. Ebengate don’t now how to awnser phones, i send them e-mails with no reply, It feels like I’m paying them £200 a month, for nothing. They ask for annual reviews, but give none themselves.
Sara (Debt Camel) says
Is Tim Pope your Insolvency Practitioner? This should have been on your original IVA paperwork. And you should have been told if it had ever been changed after that.
Daniel says
No it’s says Peter Jackson, will still be there, that was 2020 tho.
Sara (Debt Camel) says
ok as the article above says, I think the IP to Jackson’s IVAs has been changed to Pop. I suggest you send him a complaint by email: send to tim.pope@tjpinsolvency.co.uk and tim.pope@ebenegate.co.uk and copy this to customer@ebenegate.co.uk and explain your concerns, how you are being contacted by creditors and hoe you are not getting any replies from ebene gate.
Drizzle Cakes says
We’ve got only 3 months left of our IVA and can’t wait to finally be free. We’ve been trying to get a hold of Ebengate for 3 weeks now but to no avail. Just wanted to ask a question but getting vague answers that don’t help at all. The sooner this is all over the better
Sara lloyd says
I have finished my iva with ebengate (just) but they keep on asking for £130 which they say is missing from February, funny this is when they changed over from vanguard to making me pay by card, I showed them my bank account and said it was all fine but I’ve not heard anything else as to when my account will be closed.
Sara (Debt Camel) says
I should ask them what is happening in a month. I hope you have cancelled the payments to them.
Sara Lloyd says
Thank you, yes I have cancelled my payments to them. I contacted them today and they are saying that I missed a payment in 2020!!!! I have proof that I have never missed a payment and why are they only now contacting me.
Sara (Debt Camel) says
I suggest you send the proof.
Tracey Lane says
I am also with ebenegate, originally Vanguard. I finished my IVA in May 2022, still no completion certificate. I keep getting fobbed off and spoke to in riddles. Really starting to panic that it is a rouge firm.
Sara (Debt Camel) says
have you sent a formal written complaint?
Tracey Lane says
I have sent several email’s, but not a complaint in letter format. I have asked Ebenegate who my supervisor is and they are telling me they cannot tell me. A Tim Pope is on my IVA registry but my email to him bounces back as blocked.
Sara (Debt Camel) says
an email is fine, it doesn’t have to be a letter. Put COMPLAINT as the subject. Try tim.pope@tjpinsolvency.co.uk – if that doesnt get a reply, let me know.
Lyndsey l says
Hi, I’m really starting to worry about my IVA, again like mostly others transferred over to Ebenegate from vanguard.
I’ve queried my payments and I keep on getting told when my final payment is due , originally it was March and then told it was April and now its been pushed back to July.
Please can someone give me hope with a finalised IVA where they can go back to normal life without with debt?!
Sara (Debt Camel) says
Why are they pushing your past payment date back? Have you had extra income? Have they taken account of your rising cost of living?
Tracey Lane says
Hi, I want to give you some reassurance. My long awaited completion certificate from ebenegate arrived in my inbox today!
Don’t get me wrong it was not plain sailing. I had to put in an official complaint after waiting 8 months for the closure. Within 7 days of the complaint the certificate arrived.
Sarah says
Hi,
I currently have the misfortune of having to deal with Ebenegate. My account was sold to them from Vanguard. I am having a horrific time with them and I am looking to put in a formal complaint to the ombudsman about them. I have fount out that apparently this Tim Pope is my IP i was not even aware of this until trying to put in my complaint. I have tried to send an email of complaint in the first instance after exhausting all my complaint efforts with Ebenegate to Tim Pope and have sent it to his ebenegate email address and the one at TJP consultancy and the one at Ebenegate has bounced back as unknown. Does anyone know his status of involvement with Ebengate currently please ?
Claire says
Hi
A quick question – I’ve got an IVA with said company and came into some money to be able to clear my account. I’ve been trying to do this since Dec 22 and they’re just not interested if that’s the case can I still pay my monthly payment and continue as normal as the money I have can pay off our holiday have spending money and get a new sofa for our home
Sara (Debt Camel) says
Not unless the IVA firm has clearly said in writing that they they have no interest in the money.
Daniel says
How, come iva always want to see my bank statements, wage slips every year, but then show me no evidence, of where they’re spending my dosh. Feel like I’m getting robbed
Sara (Debt Camel) says
They should give you details of how much has been distributed to your creditors if you ask.
Sara Lloyd says
They should send you a statement every year.
Terence says
Help me please I have an Iva I. M 77 years old now it will be 6 years this October can I stop paying
Sara (Debt Camel) says
Was your IVA originally 5 years? Do you have a house with equity?
Terence says
I will have to get my original papers out tomorrow. Iva was taken out sept 2017. I thought for five years. But this sept will be a full 6 years I have paid. And never missed a payment. But times are very difficult now. I live in one bed council flat as I. M disabled
Sara (Debt Camel) says
ok, have a look at those papers. As that doesn’t sound right.
Terence says
Vanguard ref 43659. No mention of 5 or 6 year term. But by this sept I would have been paying for 6 years never missed a payment. I want to know if I can stop payment. Now. I cannot contact ebengate. Chairman report 12 October 2017. Other hearing in dudley county court 18-9-2017 the name Jim Gibson at crediters meeting. Any help or advice would be really helpful
Sara (Debt Camel) says
I will email you a phone number and email address you can contact
Terence says
Sara I sent email to both those names you sent me. Both. Emails rejected
Sara (Debt Camel) says
I gave you three email addresses?
Chris says
Hi, We have an IVA (originally Vanguard, moved to Ebenegate). We’re coming to the end of year 4, but we’ve already paid over the amount that we were expected to pay by the end of year 5 (due to receiving some inheritance). Is it correct that we still have to carry on paying the monthly fee until the end of year 5?
Also – I want to make everyone aware of a potential scam as Ebenegate called me today to say this month’s payment hasn’t gone through and he wanted me to pay by card over the phone (I thought this was very strange considering it’s a standing order and I knew there shouldn’t have been any issues). I also never transferred over to card payments when they were trying to get everyone to change. I told him he’d have to call back later when I have my debit card on me as it sounded suspicious and I wanted some time to investigate.
After checking my online banking, I found that the payment has gone through fine, so I’m not sure if it’s someone trying to scam money out of me, or it’s just Ebenegate’s under-handed way of trying to get my card details for future payments.
What advantage is it for them if the payments are by card rather than a standing order?
Sara (Debt Camel) says
Is it correct that we still have to carry on paying the monthly fee until the end of year 5?
Yes unless you have repaid all the debts that went into your IVA plus the IVA fees in full
Also – I want to make everyone aware of a potential scam
Have you reported this to Ebenegate? You should.
What advantage is it for them if the payments are by card rather than a standing order?
They wanted the payments made by continuous payment authority. That is easier for them to change the amount and harder for you to cancel than a standing order.
LUKE says
Hi
i have an IVA originally with Vanguard now Ebenegate. in year 5, suddenly i have been told the a/c my monthly payment goes to is being closed down and they want to set up an RCP. after seeing the above i’m slightly concerned; although they have given me the option of setting up a standing order with Account name: Tim Pope General Client Acc ; i am assuming this is a safer option if i want to stop payments at the end of my IVA ?
Sara (Debt Camel) says
A standing order leaves you in control
Edward says
Hi Sara,
My Situation is same as that of LUKE’S. Why another CHANGE AGAIN. From Vanguard to Ebenegate, from Ebenegate to Tim Pope’s General Clients Account, are we really safe under Tim Pope, is this account not Tim Pope’s personal account, are we not making someone rich from our daily struggles. Oh! how I have REGRETTED SIGNING UP FOR AN IVA. I am still struggling to set up this Standing Order because I have completely lost CONFIDENCE in Tim Pope, Ebenegate, vanguard, whatever their names they come up are, they are a treat to our debt free lives. I have made a big mistake for signing up, really didn’t know what an IVA really involves, was forced into signing up by one, called MO, I have really REGRETTED 🙁🙁😞😥😥
Sara (Debt Camel) says
I am afraid that once you are in an IVA you have no control over the administration of it – it is not uncommon for this to change during an IVA. Tim Pope is the Insolvency Practitioner for your IVA – you are paying into a segregated client account, not his personal bank account.
Unless you think its a good idea for your IVA to fail, you need To keep making the payments.
It may have been a mistake to agree to an IVA at the start. But how long does yours have to go? Are the payments affordable? If they aren’t, have you asked for them to be reduced? You may have other options apart from failing it.
Choosing to fail an IVA if the payments are affordable is unlikely to be a good idea… I suggest you need To talk to a debt adviser about your options.
luke says
hi Edward, i have just swapped my Standing Order details i DID NOT follow their initial instruction/ push to set up an RCP . dont feel quite so stressed about it now. just seemed odd that in my final year they wanted to make these changes. will be very vigilant in July 2024 when my IVA should finish.
Edward says
Yes LUKE, I will heed to Sara’s advice and I will change the standing order details by Sunday. I will follow in your footsteps and do same. Thanks for your support. Cheers.
Edward says
Thanks Sara for your good response. I was DECEIVED it’s a one time payment of 185 pounds for 6years, I paid this amount for one year, the next year , it was increased to 210 pounds. And the SHOCKING came for another renewal. It was REDICULOUSLY increased to 310 pounds, I was really ANGRY, I was in shock, I was ready to fail it, I felt really deceived, then the lady said she would give me a one time payment of 264 pounds until the IVA is completed. So I am paying 264 pounds every month, for two years and more now, I think. Sara, I may have 22 or 23 months left for the completion of this life burden. Thank you.
Sara (Debt Camel) says
Is the 264 affordable? Have your expenses gone up? Has your income gone up?
Edward says
Dear Sara, I feel tensed every month because I have to MAKE SURE I get this money before all others. I have to manage to make it affordable. I have to do extra shifts to meet this. When I do not get extra shifts then trouble and pressure begins.I remember going to my manager pleading with him to give me 24 shifts a month, doing 24 shifts is never an easy thing, I don’t get these shifts every month. My income has never increased since two or more years.All I struggle for more is more shifts to increase my income which leaves me no life, because I am always not at home, IT’S HARD SARA, little rest, yes little rest. Hmmmmmmmmmm, life goes on, I will press on until this burden is over and done with, Sara.
Sara (Debt Camel) says
The more you earn, the more they say you have to pay… I think you should talk to National Debtline on 0808 808 4000 and ask them to assess what your disposable income is. It may be that you can ask for the IVA payments to be reduced.
Also most IVAs are for 60 months, so you need To know how long this still has to run.
Sara L says
My IVA was closed in March but I still have one debt on my account as showing still open. All the others have been closed and cancelled and my IVA has been closed (still no certificate). I have emailed them but surprise surprise they haven’t answered .
Sara (Debt Camel) says
Which is the creditor that hasn’t updated their record?
Does your IVA show on the insolvency register https://www.insolvencydirect.bis.gov.uk/eiir/?
Sara L says
Thank you, I have checked the register and I am not on there. The company is Perch. Many thanks
Sara (Debt Camel) says
Ok I think you need to contact the IVA firm and ask why you have not been sent a completion certificate. Because that is what you need To send to Perch.
Sara L says
Thank you, I have already asked and they have not replied
Sara (Debt Camel) says
Make a formal complaint in writing
Paul grey says
Very interesting
I was transferred from vanguard to ebengate (year4)
I was sent an email from ebengate a couple of months back saying my new supervisor is Tim pope
I stumbled upon this forum tonight as I have had no reply from ebengate for months after several emails ??
My payments are still coming out as card charges
I have emailed Tim pope tonight 29/11/2023
Hopefully I will receive. Reply with info on statements as o hsve had none since 2020 and final finish date of the Iva
Samantha Warburton says
Hi Paul
I am sorry to hear you have not received a response to your queries. Please can you send these to me directly at samantha.warburton@ebenegate.co.uk so I may help you.
Thanks
Sam
Paul says
Hi Sam
I did get a response and it seems all the email addresses for responses have changed
Which I now have
And a telephone number
I’m one year from completion so nice to know things are moving on
Thank you for your reply