The recognised standard
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Established in 1939, the Institute of Credit Management is Europe's largest association for the credit management profession

Institute welcomes Insolvency Service announcement and says the real Challenge is yet to begin

5 July 2013

Philip King, Chief Executive of the Institute of Credit Management (ICM), has welcomed the Insolvency Service (IS) plans to ensure that future complaints will be managed through a common Complaints Gateway hosted by the service in Leeds. Previously, complainants would have needed to work out which of the eight relevant authorising bodies to complain to.

Mr King, who was appointed Sector Champion of the Government’s Red Tape Challenge initiative, also welcomed the initiative’s other conclusions, especially the call for greater use of electronic communications, the streamlining of the process by which IPs report misconduct by directors, and allowing creditors to opt out of receiving further communications where they no longer have an interest in the insolvency.

“We believe that making insolvency processes more efficient and harnessing new technology to streamline the process still further will ultimately enhance the creditors’ position, reduce the overall cost of administrations, and further improve the relationship between creditors and IPs,” he says.

However, he suggests that the real challenge is perhaps now only just beginning: “The Red Tape Challenge has provided an opportunity to bring together the views of various stakeholders and has helped the drive for change in the way creditors look at insolvency,” he continues.

“But making it easier to complain is only one half of the issue. The Insolvency Service must also help to educate businesses into what actions they can take earlier in the insolvency process to prevent the need to complain in the first place. Greater general awareness of the process, its procedures and the rights of creditors is also essential.”

The Annual Review of the Insolvency Service shows that complaints to the authorising bodies increased by 12 percent over 2011 (to 578) confirming the need for a more streamlined approach: “By making it easier to complain we expect this number to rise,” Philip continues, “but from a positive perspective, it will give the insolvency profession greater visibility and clarity about who is complaining and what they are complaining about, and this in turn will help shape future policy and identify nefarious operators.

“We are looking forward to working closely with the insolvency profession, the IS and Government as legislation is drafted to implement the changes.”