The Insolvency Service is a government agency that helps to deliver economic confidence by supporting those in financial distress, tackling financial wrongdoing and maximising returns to creditors. The company provides information and guidance on bankruptcy, company insolvency and misconduct of trading companies and partnerships and deals with misconduct through investigation of companies and enforcement.

Meeting Date: 4 April 2017

Matters Discussed:

On 4 April the Victims’ Commissioner (VC) met with the Chief Executive Officer (CEO) of the Insolvency Service (IS), Sarah Albon, to discuss how the IS meets its obligations under the Code of Practice for Victims and Witnesses.

The CEO outlined recent changes whereby the IS had assumed responsibility for prosecutions of those suspected of financial wrongdoing, this work having previously been done by Enforcement teams based in the Department for Business, Energy and Industrial Strategy. The benefit of this change in responsibility is that the IS can work in a more joined up way, identifying where there is both civil and criminal wrongdoing and thereby identifying who the victims are.

The IS has a prosecution team and it is that team that has responsibility for victims and ensuring compliance with the Code. The team seeks to identify the harm being done to victims of unlawful activity.

The IS undertakes customer satisfaction surveys and there are plans to extend this survey to victims and witnesses. The VC welcomed this move and was keen to hear how this develops.

The CEO advised the VC that in cases being referred to court, victims were offered the opportunity to submit a Victim Personal Statement (VPS).  The CEO was keen to make the point that the VPS was important in underlining the point that financial crimes are not “theoretical” and as such, they were not victim free.

The IS has also in 2015 implemented a new practice of giving victims of financial crime a “right of review” in cases where the decision is taken not to prosecute.  Again, this initiative was welcomed by the VC.

The IS were also keen to increase awareness of financial crimes (scams, including fraudulent investment schemes) so that fewer people become victims in the first place. Many victims were older people looking to get a better rate of returns on their investments. Therefore the IS is working in close partnership with organisations such as Age UK.

Other victims are small traders and businesses. The VC and CEO were in agreement that it was important to recognise the human dynamics with these victims, some of whom will be forced out of business because of criminality.

Another group of victims are employees, for example, those whose NI contributions have not been submitted to the exchequer, or whose pension contributions have been diverted.  The IS has powers to top up pension and NI contributions in these cases.

The IS were concerned that companies can, at present, dissolve themselves in order to avoid investigation or when they have an ET claim against them. Consideration was being given as to whether the law needed to be changed to prevent this from happening.

The IS works closely with other enforcement agencies to tackle wrongdoing and to establish who might be best place to initiate investigations and prosecutions.

The VC asked about face to face contact with victims. The CEO confirmed that IS has a lot of contact with victims and works closely with them.

The VC asked about internal guidance issued to staff on how to treat victims. The CEO confirmed that such guidance was in place and the intention was always to tailor support to meet individual needs.

The CEO recognised that many victims, particularly older victims, felt embarrassed at having been defrauded. She confirmed that staff were required to adopt a “non-blaming” attitude.

The VC asked how victims were referred to local victim support services.  The CEO undertook to find out and get back to the VC with details.

The VC and CEO agreed that in 2018 the IS would be invited to submit a written update on how it was supporting victims.

Following the meeting the CEO of the Insolvency Service wrote to Victims’ Commissioner.