Insolvency practitioners are overpaid £15m a year because unsecured creditors are unable to rein in their fees, the Office of Fair Trading reported last week.

In its study on the market for corporate insolvency, the OFT recommended that the government create an independent complaints-handling body to ‘help correct the imbalance in power’. It recommended that any such body should have the power to force practitioners who overcharge to refund ­creditors.

There were 1,746 authorised IPs in Britain on 1 January, most from an accounting or legal background.

The OFT said that, where secured creditors such as banks do not recover their assets in full from an insolvency, the market works ‘reasonably well’. However, when secured creditors are paid in full, the remaining unsecured creditors find it hard to control or influence the insolvency process, and suffer as a result.

The report said that IP fees are 9% higher when secured creditors recover their debts in full and unsecured creditors pay the IP fee out of their own claims – equivalent to £15m of overpayments per year.