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Alternative Dispute Resolution Agents

This weekend saw various newspapers and news websites feature information about Alternative Dispute Resolution Agents ( ADRs). Last week the NCR held a workshop in Gauteng trying to gain more clarity on ADRs and how to try regulate their activities.

What is an ADRA?

An ADRA or ADR (as us lazy industry folk like to call them) are people or organisations that can help when a consumer and credit provider have a dispute.

For example: If a consumer feels that a Bank is charging too much interest (beyond the legal limit) or is treating them in a discriminatory way they can approach an ADR such as the Credit Ombud or even a Debt Counsellor.

Organisations funded by credit providers such as the National Debt Mediation Association  (NDMA) also see themselves as ADRs however they tend to offer services more in line with Debt Counseling than debt mediation a lot of the time.


What is the difference between an ADR and A Debt Counsellor?


ADRs do not need any qualification

ADRs have no detailed set of guidelines in the NCA or Regulations (it’s a bit vaugue)

ADRs do not need to register with the NCR (basically anyone can do it)

ADRS cannot handle multiple accounts (only a single matter at a time or matters with a single credit provider at a time)

ADRS cannot arrange reduced payments on debts (That is what Debt Counsellors do)

It is important to remember that when a consumer does not have enough money to pay all their debts this does not constitute a dispute. As such, a consumer in this position needs to approach a Debt Counsellor not an ADR.


Strange but true

What is strange is that while an ADR ( for example the Banking Ombud) might not be a Qualified Debt Counsellor (because they have not  gone for the training and written the tests and been certified by the NCR) a Debt Counsellor can always act as an ADR.