According to new reports, debt management organisations are actively targeting heavily indebted borrowers, by paying substantial fees to lenders in order to acquire their details.

It is suggested that DM companies are willing to pay anywhere up to £1,000 pounds per potential candidate who has been identified as non-credit worthy. Reports indicate that DM co’s stand to make large profits from potential IVA candidates, to the tune of almost £8’000 over a 5 year period.

The way in which some companies identify genuine IVA cases has raised cause for concern, and it is believed that a large percentage of active IVA candidates have entered under false pretences. Debt charities are accusing loan companies of farming out potential cases to IVA firms, and are questioning the ethical conduct of such practices.

One of the UK’s leading debt charities reports that a mere 4% of all its enquirers genuinely qualify for an IVA. The bulk of its clients are directed towards a Debt management plan, or Bankruptcy.

Although the data only refers to small percentage of the industry, it is still important for individuals struggling with debt to seek professional, impartial advice before committing to any debt tool.