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Still No Clarity On DCRS

For a while now, the credit provider community and in particular BASA members have been expressing concern over the low adoption of their Debt Counselling Rules System (DCRS).

DCRS is a set of debt restructuring calculation rules which sprang out of the old NDMA ‘rules’ as well as the NCR task team report of 2009. The idea was to have an agreed way to automatically agree to any proposal they received through this particular computer programme without having to check every detail. Basically, the idea was to replace people with a good set of standard rules which made everyone fairly happy.

Due to, not only errors with the programme but poor advertising and almost non-existent promotion of the system to Debt Counsellors, DCRS has gained popularity only with the largest debt counselling firms, in the main. While that does mean that most debt counselling matters are run through the system (numerically) to see if they will work (not all cases will work through the system as it does not really cater for the very poor very well) many Debt Counsellors have simply ignored or even boycotted the system

The National Credit Regulator (NCR) has come out strongly in favour of the system for some reason. Perhaps, since DCRS is a way to speed up the debt review process the NCR feel that using this computer programme is a good idea since that helps debt counselling firms be more cost effective and thus stay in business for longer.

The banks however, were never able to really bring themselves to trust the system and ended up checking all the proposals they received through the system anyway

The banks however, were never able to really bring themselves to trust the system and ended up checking all the proposals they received through the system anyway meaning it did not really save them any money. More than that the system which has been bogged down with bugs and other issues costs a lot of money to run. Perhaps too much money. That seemed to be the main cause for concern among those footing the bill. Eventually the first of the big banks decided to spend their money elsewhere and stop paying the bills for the hosting and maintenance of DCRS

NCR LogoThe NCR recently announced that they are looking to take over this former bank system and run it themselves (for some strange unknown reason). It does appear however that come the end of the month no one will be paying the bills if the NCR can’t get their announced negotiations with “several parties” to succeed. That could signal the end of DCRS.

The NCR have asked that should DCRS fall away, credit providers please stick to the ideas and agreements behind the DCRS “rules” or at least the NCR Task Team Report guideline they published a little while back. Many Debt Counsellors too hope that the credit providers will do so, as these commonly agreed terms and voluntary concessions on the part of credit providers offer great savings to consumers with little or no fighting.

It seems that DCRS is on the ropes and may be down for the count if the NCR’s plan doesn’t work out. If the major issue is money to pay the bills then this presents the NCR with a serious problem since they have also faced cash flow challenges in the past and seem unlikely to have available funds to pay for the system at the current rates.