Jasmine Birtles
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How to Spot IVA Scams and Protect Yourself From Debt Relief Fraud
Moneymagpie Team
2nd Jun 2025
When you’re dealing with debt, it’s normal to feel stressed, anxious, or overwhelmed. This can leave you in a vulnerable position, and unfortunately, that’s what scammers count on. Whether you’re considering an Individual Voluntary Arrangement (IVA) to pay off your debt or you’re already in one, you should be on high alert for scams. Knowing how they work is the first step to protecting yourself. Here’s how to spot scam warning signs and ensure you only deal with reputable, trusted firms.
- How IVA Scams Work
- Red Flags to Watch Out For
- What Happens If You’re Scammed?
- How to Check if a Company is Legitimate
- Endnote
How IVA Scams Work
Scammers are targeting both people looking for an IVA and those already in one. As with most scams, they tend to involve promises that sound too good to be true. Scammers may try to contact you directly via phone, email, or direct mail, or you might see their services advertised online. They might:
- Say you were mis-sold an IVA and deserve compensation
- Tell you to stop paying your insolvency practitioner
- Offer to help end your IVA early
- Use phrases like “backed by government legislation”
- Avoid saying exactly who they are or who they work for
- Be unable to provide company registration details
They may also apply pressure for you to make a fast decision or act quickly. This tactic isn’t new. Similar scams have been seen in other countries, too. In Canada, for example, scammers are using the same tricks to target people with a consumer proposal (the Canadian version of an IVA).
Red Flags to Watch Out For
Scams are getting incredibly advanced and can be hard to spot. Here are a few things to look out for that may indicate it’s a scam.
- They contacted you first
- They guarantee to write off most of your debt
- You’re asked to pay upfront for help
- They offer you a loan, then push you toward an IVA
- You can’t tell which company or advisor you’re speaking with
- They don’t tell you about other debt solutions like bankruptcy or DMPs
What Happens If You’re Scammed?
Scammers are after your money, so if they succeed, you’ll be left in a worse financial situation. If you stop paying your real IVA and start paying a scammer instead, your IVA may be cancelled, and you’ll still owe your original debts. Your credit score could take another hit. The money you send to the scammer may never be recovered.
How to Check if a Company is Legitimate
Real debt advice firms are authorised by the Financial Conduct Authority (FCA). Insolvency practitioners must be licensed and registered, too. Before you speak to anyone, check that they are listed on the appropriate regulatory and government databases. Do not take anyone’s word for it, even if the scammer claims to be working with your IVA provider. Always check for yourself.
Endnote
If you’re worried about your IVA, don’t stop paying. Contact your IVA provider first. They can review your details and suggest changes to the plan, if creditors agree. You don’t need to pay anyone to do this for you. Free help is available from trusted sources, like the Debt Advice Foundation, Citizens Advice, and the UK Government website. Most critically, to stay safe, ask questions and check credentials. And never rush into anything when it comes to your IVA.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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