Yesterday the Insolvency Exchange (TIX) proudly announced and boasted the rollout of a "major package of changes to the acceptance criteria for Individual Voluntary Arrangements." While you have to applaud the TIX group for not being bashful about coming forward, you've got to wonder how they can be so proud about changes that do nothing to fix the real problem of consumers getting screwed in IVA reforms which only benefit creditors.

I don't think it is an unreasonable expectation that as a society we shoot for fairness and balance as the target in resolving problems. But I would be dumbstruck if someone would be able to come forward to say that the recently announced IVA reforms benefit consumers in the least.

The current trouble with the IVA marketplace is that creditors are not properly considering fair, reasonable and sustainable binding repayment proposals from consumers in financial trouble. Many creditors in the UK today would rather inflict pain and agony into the lives of consumers struggling enormous financial pressure, by rejecting their IVA repayment proposals, than extend a helpful hand to resolve the problem.

The situation today is so bad that it is almost as if the creditors are putting a boot to the face of the consumer sinking into debt quicksand while at the same time holding a placard that reads "I'm Here to Help."

The Insolvency Exchange press release goes on to say that "the changes will benefit all parties associated with an IVA", but does it really? While it might give you a warm fuzzy feeling to think that these changes make the world a safer and happier place to live, they don't, at least for consumers.

These recently announced changes are all designed to benefit one party, not all as proclaimed. And in case you haven't received your invitation in the post, the party is at the creditor's house.

Forcing insolvency practitioners (IPs) to adopt new and expensive processes and procedures to provide "operational efficiencies" only serves the creditors in their desire to ram fee reductions down the throat of IPs.

You see what the Insolvency Exchange release fails to mention is that creditors are treating UK consumers with contempt and disgust when it comes to allowing people to repay their debt is a fair, reasonable and sustainable way. Operational efficiencies are great for reducing processing costs but that's not where the problems in the IVA marketplace today, unless you are a creditor.

The elephant in the room that nobody can see is the fact that creditors are arbitrarily rejecting fair repayment proposals from consumers, even though the person is making their best effort to repay, simply because the creditor created a line in the sand of requiring at least a certain rate of return that make the creditor gleeful. And if that can't be done, the repayment proposal is rejected and the consumer is told to tuck their tail between their legs and go away.

Creditors are boasting that these ridiculous and grossly unfair policies are working because they can't see a large increase in people going bankrupt after their IVA repayment proposal is rejected.  I can only assume that creditors feel that they've batted away the consumer from entering a fair and binding repayment arrangement, only to toss them back into the mass of consumers financially limping along towards the quagmire of debt.

In an ongoing survey about IVAs that is being conducted at http://iva.questionpro.com , people are responding that they would seek other options if their IVA proposal was rejected. When asked "If you propose an IVA to repay your debt and your creditors do not accept your proposal, which of the following options would you consider to resolve your financial problems?" Respondents gave the following responses: Borrow money from a friend or family member - 0%, Enter an informal debt management plan. - 35.71%, Bankruptcy - 42.86%, or Do nothing for now and evaluate my options latter. - 21.43%.

The current crisis in IVAs is not if processors or IPs have "operational efficiencies" but that consumers are not being treated fairly according to codes established by the Financial Services Authority, or the Banking Code proudly promoted by the British Bankers Association.

Creditors are regulated by the Financial Services Authority (FSA) but seem to feel it is acceptable and appropriate to flagrantly ignore the FSA position that "Treating customers fairly (TCF) is central to the delivery of our retail regulatory agenda as well as being a key part of our move to principles-based regulation." It is?

The FSA defines their position and expectations of what treating customers fairly means, which include with the following statements.

1. Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

2. Where consumers receive advice, the advice is suitable and takes account of their circumstances.

There is almost no way on this earth that creditors could even begin to cry that they are remotely living up to these standards because they just are not.

When a consumer comes forward to propose an IVA repayment proposal, their situation is reviewed by a licensed and regulated insolvency practitioner. That IP has made a professional decision that the consumer's best course of action is an Individual Voluntary Arrangement and then endeavours to create a repayment proposal that is fair to the creditor and the debtor.

So why do creditors get to arbitrarily reject these fair and reasonable repayment offers based on the creditors own self-serving criteria? The answer lies with an answer lies with a question an interviewer once asked Rod Stewart. Rod was asked why do rock stars date super models and he answered, "Because they can." And creditors reject fair and reasonable repayment proposals put forward by licensed and regulated insolvency professionals, just because they can.

I can't help wonder why even the Office of Fair Trading (OFT) is not outspoken about this mean spirited creditor behaviour since it is specifically against the founding OFT principals of encouraging businesses to comply with consumer law and certainly to comply with industry regulations that are designed to protect consumers.

The British Banking Association  Banking Code is not worth the space it takes up. When push comes to shove and creditors are confronted with the facts that they are purposefully disregarding the Banking Code, they claim that they don't need to because the BBA Banking Code is voluntary. Evidently it is a Banking Code that can be disregarded at will but is supposed to offer consumers some comfort of protection. Make that virtual comfort.

Evidently when the banking code says "If you find yourself in financial difficulties, you should let us know as soon as possible. We will do all we can to help you to overcome your difficulties. With your cooperation, we will develop a plan with you for dealing with your financial difficulties and we will tell you in writing what we have agreed.", what they really mean to say is that you should not be surprised if your creditors turn away and do not lend a hand.

When the BBA promotes a Banking Code that states "If you have debts with many creditors, a debt-counselling organisation may complete a Common Financial Statement (or equivalent acceptable to us) on your behalf, which we will accept as the basis for negotiations with you in drawing up a debt-management plan.", what they really mean to say is that even though you have sought advice and assistance from a licensed and regulated insolvency professional that has prepared an extensive financial statement, your creditors can ignore it and not take it into account if they feel like it.

So if the BBA Banking Code is a toothless tiger and can be ignored when convenient by creditors, maybe the time has come, as the Conservative Party suggests, to replace the voluntary Banking Code with a statutory Bank Customers' Charter that has the power of law behind it. It just seems unfair that UK creditors are the only area that is still self-regulated in the financial sector.

Here are some examples of reported unfair creditor behaviours that raise concern. This is not an exhaustive list and the information has been provided by insolvency practitioners regarding actual cases rejected.

HSBC has an arbitrary minimum threshold of 40p in the £.

RBS have an arbitrary minimum threshold of 25p in the £.

Student Loans have an arbitrary minimum threshold of 80p in the £.

HFC typically requests higher contributions to a level that the debtor cannot afford

KPMG who vote on behalf of Abbey, Barclays, Blackhorse Lloyds and MBNA do not consider IVAs which include benefits. This is despite the fact that these lenders have loaned money to the debtors on benefits in the first place.

MBNA wants to stand outside any arrangement at all and get paid separately outside the IVA.

Blackhorse have historically refused to accept any IVA where the debt was less than 12 months or greater than £5,000.

Northern Rock whispers that they seek to reject as many IVAs as possible and refuse to provide reasons for rejection.

Link Finance normally will reject all proposals irrespective of the level of dividend.

Hopefully the FSA, OFT and Insolvency Service are investigating these gross abuses of power by creditors to treat consumers unfairly. Somebody should be looking into these matters and taking action. If action cannot be taken under current UK statues then all we have to do is look at current EC directives which also set out a standard that seeks to treat customers fairly.

This isn't hard like sending men to Mars, all that should be delivered and expected is that when consumers in financial trouble make a fair and reasonable proposal to repay their debt that creditor's review and accept these repayment arrangements in an effort to help.

The real answer to the question of who is protecting consumers from the ongoing creditor abuse of debtors is that nobody is. Hopefully the Financial Ombudsman Service can ride in on a white horse and make a fair and impartial decision about the way that consumers have been treated. The FOS says that they are "completely independent and impartial – just as a judge would be if the consumer went to court instead" and let's hope that is really true, because if it is there is almost no way that the FOS could make a determination that consumers are being treated fairly at all by creditors.