When a person seeks to sort out their debt issues, they are usually overwhelmed with different suggestions and information. Sometimes this might be due to the fact that they have sought out debt management or Individual Voluntary Arrangement (IVA) providers who give information aimed to their own commercial interests. Often however, this results from the advice provided via cold-callers, although "advice" is a word used here in its very loosest sense. The sales pitch often provided by cold-callers who endeavour to sell an IVA usually includes optimistic and uninformed promises unlikely to come to fruition.

The main question that is often asked is how the heck such cold-callers ever received the details of their target. A major source of such information is actually loan brokers who may already have been contacted as a last resort to handle debt repayments instead of going down the road of taking debt advice. The cold-callers know that people included in this data can be a likely candidate for selling an IVA.

The market for obtaining such info and other similar lists is substantial and plays a major part in the marketing activities of some IVA agents and companies. Together with debt management plans and IVAs, these firms also frequently sell PPI claims services, debt elimination plans and the notorious "unenforceable credit contracts" agreement that regularly fails to deliver what it has promised. Many such services require large upfront fees to be paid before any work begins.

Such offers are of course enticing to anyone in a financial hardship, and sometimes understandable desperation can result in a fleeting failure in conclusive analysis before making a payment. Citizens Advice has noticed the phenomenon and in turn has acted through the means of a "super-complaint" to the OFT (Office of Fair Trading). Such a super-complaint challenges the OFT to investigate the matters in more detail.

Similar to other areas within the financial services industry in the UK, IVA companies will have to tread cautiously when conducting cold-calling from now on, as it is now an exercise that's at risk.

Some IVA agents also charge upfront fees before an IVA is even given and passed over to an Insolvency Practitioner who can actually deliver the service. It's typical for one or two payments to be made to such agents (which are often debt management firms) before the process commences. What is the advantage of spending this money for the consumer? There is no benefit whatsoever; they risk delaying the start of their IVA, prolonging the period during which they are legally exposed to creditors, and paying money over that certainly could've been put to better use elsewhere.

Therefore, anybody thinking of beginning an IVA should avoid the services and promises of any IVA firm that has cold-called them on the issue.

Carrying out research into direct IVA providers would be a more productive direction to consider, in order to determine those that are reliable and invite great customer reviews. The end result is likely to be a quicker and more appropriate direction to dealing with any lurking debt problem.