NCR Publish Possible Fee Guideline For Comment

New Fee Guideline – NCR Call For Comments

The National Credit Act and regulations are silent on the charges which a Debt Counsellor can ask for. In the past, only the Debt Counsellors Association and the National Credit Regulator (NCR) have published any guidelines in regard to what they think Debt Counsellors should be charging. Recently the NCR has been doing some research into the debt review process and has decided (due to a lot of pressure from DCASA and other economic factors) that they want to update their guideline or non-binding opinion on the topic*.  They have now published some suggested fees which they feel will balance the needs of consumers and Debt Counsellors.

We spoke to some Debt Counsellors about their initial reaction to the published Circular. One Debt Counsellor said he is concerned since it (the proposed fees) seems to indicate that the NCR do not want Debt Counsellors to concentrate on keeping consumers in debt review, rather only on acquiring consumers.

Another Debt Counsellor said it appears that the NCR are trying to get Debt Counsellors to do reckless lending applications and investigations but underestimate how much it is going to cost consumers in legal fees (as much as R20 000). Debt Counsellors might encourage consumers to ask them to do investigations in an effort to earn more (R250) but this will make consumers cover huge legal fees (eg R20 000) and prevent other non-guilty credit providers from getting funds for many, many months while those legal fees are paid to attorneys.

It also appears that the drive towards lots of reckless lending investigations will cause increased conflict between Debt Counsellors and credit providers after a long time of increased cooperation (to the benefit of consumers).

You can look over the proposed guideline and send the NCR comments about any of the proposed fees. They would appreciate that greatly.

 

 

Download

NCR Circular 12 of 2017- Proposed DC fee structure

You can email your comments to pmichaels@ncr.org.za by 30 September 2017.

 

 

 

 

 

*Why this matters even though it is non-binding is because the NCR are trying very hard to somehow turn their non-binding opinion/guidelines into a type of binding self-issued regulation without the need to go via the DIT and Parliament etc.

 

3 comments on “NCR Publish Possible Fee Guideline For Comment

  1. This proposed fee structure leads to extra fees upfront and in the first 12 months, but an overall reduction in fees over longer periods. Unfortunately, there is already a trend in the market to concentrate on putting a consumer under Debt Counselling (to get the upfront fees) and not to maintain them in the process. This proposed structure will just lead to that happening more. Further, the new structure will also push the DC’s to concentrate on the higher installments and the consumers that cannot afford the higher installments will find it more difficult to be helped.

    • I am glad to see Denver comment on this. In the Eastern Cape we have a great deal of in it for a minute. They sign the client the client pays the first fee and then the debt counsellor couldn’t care. There are good guys like Denver and Casper and the likes who actually care for the client. I also feel that yes the debt counsellor does need the fee Increased, maybe it just needs to be structured correctly. I see this as being a step in the right direction though. And am very happy that the NCR are actively invoulved. I look forward to ready more comments about this topic from other perspectives. I don’t think it is all bad and you can’t please everyone.

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