Yes it will delay the completion of any IVA currently being completed by up to 2 weeks to initially investigate if there are any PPI claims which warrant further investigation. Should PPI exist that could have potentially have been mis-sold there will be a completion delay of up to a further 14 weeks to establish if the PPI was mis-sold and also to recover the funds.
So in summary if there is no mis-sold PPI then a delay of 2 weeks. If there is mis-sold PPI or potentially mis-sold PPI a total delay of up to 16 weeks.
I do understand that this can be frustrating for clients who are close to completion but we are obligated to identify any assets that should be included in the IVA and to maximise the return to the creditors.
Presumably then, you are now asking about PPI at the beginning of the IVA process, as it's a shame to make people wait up to 14 weeks when they have made their last payment. It would be a shame to not have the IVA completed and then receive a windfall that would be payable to the IVA pot. Sort of penalising clients of yours when other IP's are not enforcing this PPI investigation.
I think I will have to agree to differ on opinion on this. I feel it's wrong to hold peoples lives up just because there is a chance of 'clawing' more money into the IVA pot.
Where a lump sum is refunded from the creditor it is treated as a lump sum/windfall. On some cases, typically protocol cases Insolvency Practitioners (IPs) are paid a % of realisations so this does mean that the more paid into the IVA the more the IP and the creditors get. On many older cases though the fee structure is paid pro rata so no extra fee will be received by the IP on those cases.
In addition if a creditor simply reduces the balance of their claim in the IVA then the IP will not receive any extra fees and the other creditors will receive an increased dividend.
That is correct; we are now asking all clients, including new clients.
I do appreciate your point and it is regrettable that some client’s completions are held up to identify and realise these assets but it is an obligation of the supervisor to realise any assets that are available for the benefit of creditors.
You mention that other IPs are not doing this. I would have thought that they have a responsibility to identify any assets that should be paid into the IVA. No doubt they, like Varden Nuttall have had clients claim the money back themselves, spend it and then jeopardise their IVA. Also we have spoken to creditor representatives who represent a wide range of creditors and they have indicated that these funds should be investigated and recovered where appropriate.
Any thoughts and reasoning, especially from IPs who are not attempting to recover mis-sold PPI would be very welcome.
Thnaks for the prompt response. Just one final question. If the client feels that they were not mis-sold PPI will VN still insist that the claim is investigated?
You must have read Kazzafunks mind as he has posted a similar question on another thread. I have copied my response in here for you as well:
Hi Kazzafunk, in my earlier post I mentioned some of the misconceptions regarding mis-sold PPI. An extract from my post is below:
“A customer who has been sold PPI may feel that it was sold correctly, but without full knowledge of regulatory requirements how would they know. For example, the seller may not have fully informed the customer of all of the terms and conditions and eligibility criteria. In many cases a client may be aware of ownership of the PPI policy and be happy to pay the premiums, but only when a claim is submitted do they become aware of not qualifying for some or all of the benefits of the policy.”
My point is that the client may not be aware that the PPI is mis-sold and therefore cannot confirm if it has or hasn’t. We have an obligation to maximise the return to creditors by recovering any available assets. We therefore need to establish if there is an asset. If the PPI seller has done everything above board there will be no claim, however if they have not performed to the standards set out by the Office of Fair Trading and the Financial Ombudsmen’s Service then they may have a claim to answer.
To answer your original question we are not insisting a claim is made, simply that any potential PPI claims are investigated effectively.
Hope this clears it up.
Last edited by Buckles on Tue Nov 01, 2011 3:13 pm, edited 1 time in total.
Thanks for the explanation. I can see why this is happening but I have to say I would be really upset if my life was put on hold for another four months when I had finished my IVA.
There was a poster on here recently who needed a completion certificate to apply for a job (nothing to do with VN) so delays like this could potentially cause a lot of trouble for some people.
Skippy, I totally agree that in some situations delays to completions can have a big effect on client’s lives. All I can suggest is that if any client feels that they are going to have a problem due to the delay, e.g. they cannot re-mortgage or it will affect their job then they contact their IP as soon as possible to explain the situation and see if their case can be fast tracked.
Buckles thanks for the explanation. I think that whilst VN believe that these must be investigated i must question why other IP's are not jumping on the same bandwagon and i also want to echo Kallis' comments about a delaying a completion certificate. It is not painting VN in a good light!
Hi Til,
We did not proceed with mis-sold PPI earlier as there was an on-going court case between the British Bankers Association and the Office of Fair Trading and the Financial Ombudsmen’s Service. This wasn’t resolved until May this year. Following that we consulted with industry experts and creditors representatives as we needed to be sure that we were taking the correct action before proceeding.
This unfortunately means a delay for those who are in the process of completing now. It won’t affect those completing in the future as we should have identified and resolved any PPI issues before the IVA is due to complete.
Does Liam James still work there? He used to post as an expert on here but he's not been around for a while.
Have a word with Andy Davie to see if you can be made an expert as it would be good to have another poster from VN on here.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
