Reckless Lending Webinar
Recently the National Credit Regulator (NCR) issued a new fee guideline on what they think Debt Counsellors should feel free to charge consumers who approach them for debt counselling help (at present there are no regulations about fees in the law so each counsellor can charge whatever they and their client agree upon). One of the new fees is for investigating reckless credit
What is reckless credit?
Among other things, credit is considered to have been given recklessly to a consumer under a number of situations.
Credit granted where the consumer did not get all the paperwork;
Credit granted where the consumer did not understand the obligations or language of the agreement;
Credit granted where the credit provider failed to check if the consumer could pay back the debt ;
Credit granted to a consumer who could not pay back the debt given their other obligations.
‘The National Credit Act only requires a Debt Counsellor to investigate when a consumer specifically asks them to do so’
Debt Counsellors are now being incentivised to investigate. The National Credit Act only requires a Debt Counsellor to investigate when a consumer specifically asks them to do so. Since this seldom happens regulators and other parties want to see an increase in these types of investigation and the new fee structure suggested by the NCR clearly includes an effort to drive Debt Counsellors to prompt consumers into asking for such investigations.
How Do You Investigate?
At present, there are no ‘official’ rules about how such an investigation could be conducted. Thus companies like Maximus are trying to help Debt Counsellors find good ways to do so. They are hosting an online Webinar for Debt COunsellors on Friday 13th at 9am.
If you would like to join the 30 min FREE webinar and learn more then you are welcome to register at https://zoom.us/webinar/register/WN_pZjUewcAQImvoBh4jd5VLw
It remains to be seen how credit providers react to an increased number of investigations (will they like it?) and if any further regulations come out telling the industry how it should be done. Recently credit providers won a court case against the NCR in regard to how credit assessments need to be made (using salary slips) so it is clear that even when guidance is given it can be adjusted down the line. For now, it might be good to see how other firms and Counsellors will be conducting their investigations.