CIF Proposal for Withdrawal from Debt Review
CIF To Give NCR Withdrawal Proposal
In the wake of the latest Credit Industry Forum meetings Industry parties to the CIF have until month end to sign off on a proposal for withdrawals from the debt review process. The proposal will then be handed to the NCR who may issue the proposal as a guideline to the industry.
While not law, the guidelinescan help shape the industry norm and hopefully give some resolution to the deadlock that Debt Counsellors and CPs find themselves in since the Rougier v Nedbank ruling which sees consumers and Debt Counsellors locked in debt review until the process is complete (or until smaller debts are paid once the National Credit Amendment Act comes into effect)..
In essence the CIF proposal to the NCR says that consumers can withdraw from the process but only before the 17.2 letter confirming the consumer is in fact over indebted is issued to creditors.
In terms of the NCR’s legal opinion if a consumer does not cooperate with the process after the 17.2 the DC does not have the right to withdraw (nor does the consumer).
The CIF say this is not great and propose that the DC be allowed to withdraw. The consumer however will stay under debt review. In this scenario the consumer is stuck in debt review with no access to new credit and the DC will not offer the consumer any services (until someone sues them and then the DC can blame the NCR and CIF).
It is agreed in the proposal that consumers can be transferred from one Debt Counsellor to another as is currently done.
In regard to whether a consumer can be under debt review without a Debt Counsellor the CIF seems to contradict the previous scenario and say no the consumer must have a Debt Counsellor.
It seems that some of the recommendations are more about what is convenient for Debt Counsellors and Credit Providers and not the consumer.
No Power to the People
This may have to do with the limited representation of consumers (under debt review) on the CIF.
CIF Members will need to confirm their support by the End of October 2014.
download here:
CIF Guideline on Withdrawal from Debt Review. Final