NCR Warn DCS to Renew or Face the Consequences
In a recent circular to the industry (2 Feb) the NCR warned that if a Debt Counsellor fails to pay their annual renewal fee (about to get 5 x more pricey) on time they will automatically remove the Debt Counsellors registration.
DCASA have sent their members a reminder to ensure that their members do not miss out on this vital repayment. The NCR have clearly stated that it is not their responsibility to remind registrants to make their payments.
Clients Immediately Given to Other Companies
The NCR circular also says that if a Debt Counsellor misses the payment (for example if they are in hospital and forget) all their clients will immediately be transferred to another Debt Counsellor of the NCR’s choice. There is a grace period of 30 days in which the NCR will allow the Debt Counsellor to pay a fine and get their renewal. Payments after the date will just be returned to the (former) Debt Counsellor.
DCASA Raise Issue with Transfer of Clients
DCASA have pointed out that payment of the renewal fee is part of the National Credit Act and regulations and is necessary. However they have pointed out that the transfer of consumers to another Debt Counsellor is nowhere stated by the National Credit Act. As such, it may then be possible for the Debt Counsellor to take such a matter to the National Credit Tribunal. After all the (now former) Debt Counsellor may decide to register again.
Fees Set To Increase Drastically
The DTI recently published a draft fee increase for Debt Counsellors annual renewals which will see the price increase 5 fold. They called on the industry to comment and no doubt received many comments saying it was a big jump in cost. The NCR have now planned to issue Debt Counsellors with a new certificate to hang on their walls each year which is going to require they hire a bunch of new staff to try cope for the massive increase in workload. At present their are around 2500 registered Debt Counsellors. Not many of those whoa re registered actually practice as the field is not a profitable one and has become increasingly litigious over the years causing more and more costs. Perhaps the NCR feel that by pushing up the price and making these Debt Counsellors jump through more hoops each year they may scare them off from the industry and cause their registration to lapse. This would greatly reduce the number of people whoa re qualified to assist consumers across the country with debt review. This will mean that consumers will increasingly have to turn to larger debt review firms who operate with large staff compliments and have a more call-centric approach to debt review.
Interestingly, the NCR have recently been on a seemingly very noncompetitive campaign against Debt Counselling firms using call based operation who are able to help consumers from remote areas without Debt Counsellors. Though the NCR have not clarified what they don’t like about the process they have taken out giant billboards advertising that consumers should not deal with such firms.
Conspiracy to go beyond the law?
The NCR have also been accused of wanting to try sneak their recently published non binding opinions on various industry topics (guidelines) into the conditions of registration for Debt Counsellors. The conspiracy theory goes like this: The NCR ask the Debt Counsellor to sign that they will accept these non binding opinions as binding or hold their annual renewal certificate ransom. This would mean the Debt Counsellor would not be able to get matters through the courts. The Debt Counsellor out of desperation would then sign and allow the NCR to circumvent the National Credit Act and make opinions defacto law.
Obviously if the NCR ever did so there would be a huge public and legal outcry and Debt Counsellors could appeal to the National Consumer Tribunal to remove these terms and conditions from their registration but matters such as that can take a year or more to be heard by the NCT. If in the meantime the NCR have transferred the Debt Counsellors clients to another more cooperative Debt Counsellor in the meanwhile it could bankrupt the DC in question.
If a Debt Counsellor does allow their registration to lapse, the NCR will allow them to go through the registration process again (and ask them to sign terms & conditions again) but the time periods could present issues. In the past some Debt Counsellor applicants have waited more than half a year or longer for the NCR to do the necessary police clearance checks etc. It seems that DCASA will be fighting any non NCA based transfer of consumers away from a Debt Counsellor who’s renewal does not happen on time and Debtfree will follow these developments closely. As yet there has not been any public response to these issues by the other Debt Counselling Associations
You can download the circular here: NCR Circular number 3 2016