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Recently the National Consumer Tribunal fined a Debt Counsellor R90 000 for signing someone up for debt review without them wanting to start the process.

Monyela V Witbooi

In December 2024 someone from Debt Solutions Co called a government employee (Mz Monyela) and told her that they were from the National Credit Bureau.

The sales person said that the company helps government employees get lower rates on vehicle finance.

They referenced the consumer’s R19 162 payment on her vehicle finance and said it could be lowered to R14 089. Wow!

The consumer, was actually very sick at the time and taking some serious pills during her cancer treatment. The offer seemed fantastic and when the agent sent her forms to fill in to get the discount she signed without having a close look.

Not long after that the client got a message from ABSA saying that her debit orders were being cancelled as she was now under debt review.

This was the first time she realised that these was no special government initiative to get employees lower car payment instalments. This was actually just the usual debt review process. She felt tricked.

‘While lower instalments are always nice, she did not want to be in debt review’

While lower instalments are always nice, she did not want to be in debt review. She realised she had not looked closely at the forms and she wanted to stop the process from going ahead.

The consumer, who was earning R60 929, each month, only had one debt. The car finance with ABSA for R19 162.

She had enough money left over each month (+- R40 000) to cover her normal monthly expenses and was not actually over indebted, which is required for someone to qualify for debt review.

Trying To Cancel

Once the consumer became aware that the process was actually debt review, she tried to contact Debt Solutions Co and tell them to stop. 

After a call and an email saying stop, the practice still went ahead 4 days later and sent a Form 17.2 to ABSA saying the consumer was over indebted (they were not) and that they were now accepted for debt review.

Blatant Lies by Somone at the DC Practice

When a consumer applies for debt review, they provide information on their regular monthly expenses. They do this in a Form 16. This is later added to court documents.

Later, it came out that someone at the debt counselling practice had added bogus, totally made up extra expenses like R6000 child maintenance and R3000 for travel expenses each month. 

Since the client was bedridden and was not travelling anywhere and did not have any kids, these costs were just made up to make the figures look better to the bank and courts. Shocking.

Going To the NCT

To try and sort the matter out, the consumer went to the NCR and was turned away. They were, however, eventually able to bring the matter to the National Consumer Tribunal (NCT).

Several issues were revealed during the hearing, such as the consumer’s impairment due to the cancer treatment, the bogus figures added and that the Debt Counsellor never actually dealt directly with the consumer.

When defending the matter at the NCT, the Debt Counsellor said that their team had just messed up and made a lot of errors. They could not explain why bogus figures were fraudulently added to the Form 16 and why staff went ahead days after being asked not to. They could not explain why the math showed the consumer was not over indebted but they had still proceeded with the matter. 

Judgment & Fine

The consumer’s debt review flag at the credit bureaus was ordered to be removed.

The NCT said that the Debt Counsellor (Rizqah Witbooi) had acted unprofessionally, unfairly and was in breach of their conditions of registration.

More than this, they pointed out how such fraudulent and unprofessional behaviour was bringing the entire industry into disrepute. This is why they were told to refund the client and hit with a big R90 000 fine.

Interestingly the consumer had not asked for a fine. The NCT themselves (in line with NCA Sect 150 (C ) felt that the fine was warranted to curb similar future behaviour (by all Debt Counsellors, not just this one).

The NCT also said that should the consumer decide to take further legal action at civil court to ask for damages, they would have the NCT’s support and they would supply information needed.

In fact, the NCT encourage all consumers in a similar situation to apply to them for relief.

Debt Counsellors Must Do The Right Thing

Debt Counsellors have a legal and moral obligation to fully inform consumers of the consequences of applying for debt review.

They should not try trick people into debt review with clever sales tactics. Those will quickly backfire if the consumer feels deceived.

This sort of information should be conveyed by the actual Debt Counsellor (according to T&C A3) and would be good to include in a Consumer Protection Act compliant contract with the consumer (not just an application form).

This ruling shows that you can’t simply palm off important aspects of your obligations, as set out in the NCRs T&Cs, to admin staff. Especially is this true in larger practices.

Debt Counsellors also face serious risks where they allow random staff members to manufacture false information and add it to the consumers Form 16 just to make the figures work and make them appear over indebted. That is fraudulent behaviour and they can face civil litigation. In such cases the NCT will even help the consumer go after them for compensation.