Whenever the phone rings and I get one of those pre-recorded messages I usually hang up straightaway, but over the weekend I received one that was such flagrant evidence of mis-selling I had to listen to it all the way through.

The message was part of a “national awareness campaign” to make those who are struggling with their debts aware of a government initiative that could help them. It claimed that so long as borrowers were able to make monthly “affordable” repayments over 60 months they could see a large chunk of their debt wiped off.

What this actually was, was an advert from a provider of individual voluntary arrangements – an alternative to bankruptcy that doesn’t force you to relinquish assets like your home or car.

Now, this promotion was accurate in so far as IVAs are a government initiative and that you could, potentially, wipe off some of your debts. This is clearly going to sound quite appealing to someone whose debts are taking over their life and as a result I’m sure a number of people will have accepted the message’s offer to be put straight through to a debt adviser.

However, what this message didn’t mention was that a) the IVA firm behind the message stands to make up to £9,000 for setting up the arrangement for you, b) their definition of affordable repayments could be very different to yours (they could be virtually 100% of your disposable income) and c) that towards the end of the agreement you might have to hand over some of the equity that has built up in your home.

A new code of conduct – the IVA protocol – does at least promise to bring more control into the sale of these debt solutions. It’s all very commendable, however there’s a very big but – it’s voluntary.

In a world where the sale of everything from mortgages to pet insurance is regulated, it strikes me as odd that the FSA hasn’t been forced to take charge of this mushrooming market. OK, so the Advertising Standards Agency and the Office of Fair Trading can get involved and fine offending firms or withdraw their credit licences, but the evidence so far suggests this isn’t sufficient regulation.

Debt makes people desperate, it make them ill and it breaks up marriages – when people are in such a vulnerable situation it’s only fair that they get proper, impartial advice.

Regulation can never remove the risk of mis-selling altogether, but it can help weed out the worst offenders, raise protection for consumers and improve the reputation of the firms involved.

Have you taken out an IVA? Do you think these firms need to be better regulated? Have your say in the Moneywise Forums.

• Rachel Lacey's blog
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