What Exactly Does A Debt Counsellor Have To Do?
In the past few years, the National Credit Regulator (NCR) has on a number of occasions taken individuals who work at Debt Counselling firms to the National Consumer Tribunal (NCT) over the issue of doing work that should only be done by a Debt Counsellor. This is in relation to a portion of the Act (National Credit Act) which is designed to protect the Debt Counselling industry from predatory frauds who would pose as Debt Counsellors and steal consumer’s money.
Debt Mediation Scams
The NCR has as yet to take a non Debt Counsellor to the NCT due to breaking this requirement of the Act over debt mediation scams. There are still many firms out there who offer to help consumers negotiate lower payments on debt with their credit providers. So far, the focus at the NCR has been on firms who do actually offer debt review and which staff members exactly can do what specifically within the firm. This has been compounded by the lack of clarity as to what debt review tasks should be done by a Debt Counsellor. Debt Counsellors would like to see the NCR begin to protect consumers and the industry further by working along with the police to shut down such illegal operations but it seems the long history of 3rd parties acting in behalf of consumers (when negotiating payments on debts) has created a grey area that few can successfully navigate.
Ironically then, rather than help the industry flourish, this portion of the NCA has been relegated to punishing workers at the various larger debt counselling firms.
‘There are definitely some functions of the Debt Counselling process which should be performed by a Debt Counsellor’
Most Debt Counsellors do want to see consumers getting the best service from the most qualified people. There are definitely some functions of the Debt Counselling process which should be performed by a Debt Counsellor. Over the next few articles, we are going to look at the various requirements that the NCA sets out for Debt COunsellors and discuss some of the questions that are raised about this topic in view of technology and common industry practice.
Interestingly only Debt Counsellors and Alternative Dispute Resolution Agents register as individuals. All other parties in the National Credit Act can register as a company (eg. a Credit Provider, Credit Bureau or Payment Distribution Agent). While these other parties can register as an individual, they are discussed in the Act in terms of a company as well, so they have this option. At present, Debt Counsellors do not have this option though the Act is once again being amended at present (so far this has not been discussed in the draft bill).
If you are approaching someone for help with your debt, ensure that you are dealing with a Debt Counsellor who is registered with the NCR. Ask to see their certificate from the NCR. If they do not have this then they are not meant to be offering the services of a Debt Counsellor report them to the NCR or the police.
National Credit Act:
44. (1) A natural person may apply to be registered as a debt counsellor.
(2) A person must not offer or engage in the services of a debt counsellor in terms of 25 this Act, or hold themselves out to the public as being authorised to offer any such service, unless that person is registered as such in terms of this Chapter.
NEXT: Registering as a Debt Counsellor