The Insolvency Service of Ireland are already starting in on audits of regulated providers to ensure they have the proper procedures in place to deal with people correctly and that they are in adherence to the code.
From our perspective we see it as a very proactive move and a positive one for the regulated debt advisor sector. People complain all the time about ‘light touch regulation’ and it exists in part because the regulators in question are not out there looking into the affairs of the market participants, or the market participants are finding ways to duck the rules the normal firms have to abide by.
Regulatory arbitrage is thankfully not present in the PIP space the way it is in the debt mediation industry. You can’t call yourself a ‘Personal Insolvency Practitioner’ unless you actually are one whereas it is still the case that unregulated entities can call themselves debt mediators and charge for the service.
How long should they wait before the start a process like this given so few PIA’s have been done? No time at all it seems, and while it may seem like jumping the gun, the reality is that if you are going to regulate and have strong oversight you do that from day one, something other regulators would do well to learn from.
We aren’t fans of the extra work it involves, nobody likes audits be it from the ISI, the tax authority or the Central Bank, but you equally can’t fault them for wanting robust oversight from day one and for that we commend the approach.
The detractors of the insolvency system constantly bemoan it saying it ‘doesn’t work’, many have never made a PIA application, haven’t produced the figures of the many examples that ‘don’t work’ or come to terms with the fact that it has been one of the best ways to get debtor and creditor talking and doing deals outside of the formal route.
It’s unpopular right now to say that personal insolvency is working because it’s greatest achievement has been as a counterweight, but from a debt advisors perspective on the coalface it’s doing a good job of being the incentive that gets people into negotiations.
For that, and for the early regulatory intervention of getting audits started the Insolvency Service deserves some kudos.