The NCR and Debt Counselling

The debt counselling industry and all debt counsellors are regulated by the National Credit Regulator (NCR). They recently answered some questions on the industry, the NCR and debt counselling.

Question:
Bearing in mind that you find good and bad practitioners in every industry – how prevalent would you say “bad” debt counsellors / counselling is in the industry?

Answer:
Bad practices are as prevalent in the debt review industry as in many other regulated professions and industries. The integrity and competence of debt counsellors are essential elements and would help to improve the image of the debt review industry.

The NCR has introduced various mechanisms to reduce malpractices. For example, the requirement for payment distributions to be undertaken by distribution agents independent of debt counsellors. Also the prohibition on collection of payments from consumers by debt counsellors. All these measures were implemented to prevent theft and embezzlement of consumer monies.

Question:
What recourse (through the NCR) is there for consumers who are experiencing bad service from a debt counsellor? Can you outline the process and the possible outcomes?

Answer:
The consumer can lodge a complaint with the NCR by completing Form 29 (that can be downloaded from our website: www.ncr.org.za) and attaching all supporting documents and information to the complaint. The NCR will evaluate and investigate the complaint. Complaints can be sent to the email address [email protected].

Question:
Does debt counselling work?

Answer:
The primary objective of debt review is to protect consumers from legal action by credit providers and re-arranging their monthly repayments. If all stakeholders play their part and collaborate with one another, this objective can be achieved.

Debt review has been beneficial to the entire consumer credit market eco-system. More consumers entered debt review and billions of rands have already been repaid to credit providers. Many consumers were also issued with clearance certificates releasing them from debt review.

Overall, having a structured debt review system has contributed to the sustainability of the credit market.

We hope that these questions, answered by the NCR will give you more confidence in the process of debt review.
In conclusion, debt counselling is not a “fly-by-night industry”. It is a debt relief option that those serious about paying off their debt should definitely consider.