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.
You can email your comments to email@example.com 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.