Reading Time: 5 minutes

NCT Order Debt Counsellor Fined & Deregistered

Debt Counsellor Zahid Adams (who operates under the trading name of SA Credit Solutions) has been fined, deregistered and ordered to pay back money to potentially thousands of clients.


In 2017 the NCR received 4 complaints from consumers about the work done by Debt Counsellor Zahid Adams. This prompted them to launch an investigation into how SA Credit Solutions was handling consumer’s debt review matters.

In the past, this had resulted in a R250 000 fine against the Debt Counsellor for not doing what was required of them. This fine has never been paid. Recently the National Credit Regulator (NCR) took the findings of their investigation (of 10 client’s files – including the 4 complainants) to the National Consumer Tribunal (NCT).

The NCR asked that the Debt Counsellor once again be fined and the consumers receive their fees back. They also later asked for the Debt Counsellor to be prevented from carrying on offering debt review services.

The Court documents flew back and forth and the Attorney representing the Debt Counsellor raised many points that they felt were incorrect with the papers from the NCR. Then on the day of the hearing, the Attorney quit last minute and stopped representing the Debt Counsellor and the Debt Counsellor did not attend the virtual hearing (although the NCT allowed for an extra 30 minutes to wait around in case of technical difficulties logging in etc).

The hearing went ahead and the NCT considered the papers set before them. The papers included the technical objections and the answers to all the allegations the NCR had made based on their investigation into the 10 client’s files.

What Was The Debt Counsellor Accused of Doing Wrong?

There was quite a long list of items but some of the stand out items were:

Registering the consumer as wanting to start debt review without having them send a signed application form or at least provide the needed information to do so electronically.

Though consumers were told they had 48 hours to think about the services offered the Debt COunsellor often began the work right away.

In some cases, the Debt Counsellor got into trouble for not using the NCR database to register the client and in other cases seems not to have registered them at all but began to tell credit providers the person was under debt review.

The Debt Counsellor was meant to submit statistics every 3 months to the NCR but had not done so.

The Debt Counsellor had collected legal fees for consumers but had either taken the matters to the NCT (which can cost less and does not always need a lawyers help) or had not taken matters to court or the NCT.

In many cases, the consumer had not signed acceptance of a specific legal fee.

The Debt Counsellor had notified credit providers that the person was applying for a review of their debt (17.1) and they had been accepted for debt counselling and restructuring (17.2) on the same day. The NCR felt that without getting enough info from the consumer to prove their income and not getting information back from the consumer’s credit providers this was too fast. 

It also seems that some payments were not distributed to the right credit providers or the right accounts and in at least one case the credit provider had taken and sold the consumers vehicle despite them being in debt review.

The NCR also said that the Debt Counsellor had not stuck to their fee guideline and timelines even though they has signed that they would.

This is the abbreviated version of all the items. As you can see, there were many concerns.

The Ruling

The NCT considered all the technical points and the responses to the allegations in the papers. They found that the technical points did not stop the matter from proceeding. They also found that though the papers submitted by the Debt Counsellor denied allegations they did not provide evidence to the contrary.

As a result, they ruled against the Debt Counsellor.

‘they ruled against the Debt Counsellor’

First, they ordered that the previous fines should be paid (R250 000). They also issued a new fine of R350 000.

They then said they are taking away the Debt Counsellor’s registration and they must not practice debt review anymore.

They also said that the Debt Counsellor must arrange a full audit of all their clients and then refund any clients who had paid fees but no court order had been granted yet.

The Debt Counsellor was ordered to pay back all fees they had ever received from any of these consumers who are identified (all the fees for any and all parts of the process even if the work was done).

The NCT said they wanted to send a strong message to any other Debt Counsellors out there who were making the same mistakes.

What Can We Learn From The Ruling?

We have a few things that we can quickly take away from the ruling.

A Credit Report, while helpful for learning about a consumers debt situation quickly as a debt counsellor or credit provider, does not seem to be reliable enough in the NCR or NCT’s mind to evaluate how much debt a consumer actually has and issue a 17.2. They seem to feel that a proper evaluation should rely on information direct from credit providers. A bit of a kick in the teeth to the credit bureaus and regulations about affordability assessments.

We also learn that if a few clients, perhaps 4 clients, complain about a Debt Counsellor, PDA or credit provider it can be seen as enough for full expanded NCR investigation and ultimate deregistration. So, if ABSA, Nedbank, Standard Bank or other big name credit providers (or Debt Counsellors) are receiving any complaints (even 4) they want to be very cautious as this could lead to possible deregistration… if the complaints are legitimate. It is of course more likely that big credit providers would fight all the way to the higher courts about such a ruling. Indeed this Debt Counsellor may do the same.

Debt Counsellors should make sure that their clients sign for the exact legal fee that will be taken and not just a general description of what it could be in some sort of application document (like a form 16).

‘If you have a legal matter before the NCT then you must attend’

If you have a legal matter before the NCT then you must attend. Do not rely on your attorney who might quit last minute. Also, make sure your papers have lots of documentation to refute claims do not rely on verbal arguments or providing evidence on the day.

We also see that the NCT also feel that the NCR guidelines are enforceable if the debt counsellor agreed to the general terms and conditions of registration. If you are a Debt Counsellor who does not agree with the NCR guidelines on something you had better let them know in writing.

The affected consumers are no doubt happy that their complaints were taken so seriously and that they may be refunded their fees (if not get their car back etc). The other clients of the now deregistered Debt Counsellor face having to choose a new counsellor or more likely the NCR will just decide for them and hand their cases to whoever they feel, depending on if the Debt Counsellor decides to fight the decision or not. In the past, in similar situations, consumers have not been consulted in regard to who they now want to help them.