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NCR Punt DCRS – Others Disagree

 

DCRS or the Debt Counselling Rules System is a computer program created by Credit Providers (mainly the Banking Association of South Africa, BASA) which can produce a debt restructuring proposal which most major credit providers will accept. The system is designed to reduce guesswork as to what creditors will accept and calculate how much in the way of concessions, to consumers, the various stakeholders are willing to make in order to help a consumer repay their debt through debt review without any fights or counter proposals. One of the goals of the system is to ultimately  reduce the amount of man hours it takes for Debt Counsellors to make proposals creditors are likely to accept (negotiation) and to reduce the time needed by creditors to review proposals made by Debt Counsellors.

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The NCR recently published a industry circular about DCRS and in meetings at the CIF (Credit Industry Forum) – a NCR advisory body consisting of credit providers and Debt Counsellors- made statements that led many to feel that the NCR only want Debt Counsellors to use this computer program to work out debt review proposals to court. In the circular the NCR mentioned that the system needs some more work to align it with the National Credit Act in full. they stated: “There is still a number of work to be done on DCRS … At this stage we do however encourage usage”. In an unusual twist the  NCR have said they wish to take over the management of the DCRS system (hardware and software).

Conflicting Views

The system has received support from the Debt Counsellors Association of South Africa (DCASA) and recently criticism from the Alliance of Professional Debt Counsellors (AllProDC). AllProDC members feel that the system violates the requirements of the NCA and is suited mainly for large Debt Counselling firms using call center staff to preform the duties of a Debt Counsellor. They have not enumerated which firms these would be but have stated that the NCR would be remiss in supporting such a system, particularly to the exclusion of other methods of generating proposals to court for consumers under debt review. DCASA have said that they feel that the system, when used, is able to benefit consumers with various concessions in regard to their debts.

Interestingly both bodies sit on the Credit Industry Forum which has recently been discussing DCRS. One of the ideals of the CIF is to only make proposals to the NCR where all members agree. The NCR would then feel that since all parties agree they could issue a possible guideline in regard to such matters. It seems that there is little agreement between Debt Counsellors about use of the system.

Guidelines or Blurred Lines?

The NCR have begun to issue non binding guidelines/ opinions on certain matters arising out of the CIF and the NCR’s ability to enforce these guidelines (or just promote them) is now being explored. They recently issued guidelines in regard to the 2010 NCR Task Team Report which included (among many other things) certain elements which were included as the basis for the calculation software now known as DCRS. The NCR hope that the guidelines will encourage all parties to adopt a uniform manner in dealing with the debt review process especially in regard to matters not expressly dealt with by the NCA itself (or the coming National Credit Amendment Act 2014). The Alliance of Professional Debt Counsellors are concerned that the NCR might be stepping outside their perview under the NCA. Whatever the out come and however the matter is resolved it seems that not everyone will simply automatically agree with all such guidelines.