Reading Time: 3 minutes

Roundup: Industry Webinar Re DC Transfers

ONE recently sponsored a Webinar together with VDGC about the topic of Debt Counsellor transfers on the National Credit Regulator’s (NCR) Debt Help System.

86% who attended said they have had problems with the process.

Debt Counsellors have been dealing with the NCR’s Debt Help System for many years and like all systems have found things that can cause challenges. More than just functionality other issues with Debt Counsellor transfers include: 

    • A transfer request when the client has not paid all the fees due
    • A previous Debt Counsellor refusing a transfer for undisclosed reasons

Speakers & Presentations

There were various short presentations by guest speakers such as: 

Justin van der Linde (VDL Attorneys) who was previously at Consumer Friend for many years and has been in private practice for a year now. He says he is often asked for advice by DCs who are getting transfer requests but don’t want to do the transfer since the client still owes fees.

Most Debt Counsellors feel that if they do the transfer (on DHS) then they are guaranteed to never get the fees due for work that was already done.

A question that was posed for discussion: Could we put a system in place where the new attorney that will do the work will make assurances regarding fees due?

Timmy Vd Grijp then discussed how the current NCR guidelines on the topic do not make provision for a Debt Counsellor to refuse a transfer request due to fees outstanding.

Qhamani Loni (NCR) discussed how some unscrupulous companies are actively soliciting consumers to transfer to them (a new Debt Counsellor) so they can help the person leave debt review (perhaps when they actually cannot do so). 

Benay Sager (NDCA) spoke about different reasons why someone would want to transfer. Some genuinely need to transfer (eg. due to the death of a Debt Counsellor or the closure of a practice). He spoke about some consumers who might not even know that there is a transfer request (very unorthodox and needs to be dealt with by the NCR). Many consumers are promised smaller monthly repayments by a different Debt Counsellor. 

Question: Could we get an email alert to notify us of transfer requests? Can the DC get access to see more info that is uploaded? 

Sometimes it is hard to see if the consumer initiated the change. It would be good to have something like this visible and that they understand the costs and risks of such a change.

Most Debt Counsellors engaging in a good faith change have had reasonable success in negotiating between themselves as to how fees can be recovered after the move (if fees are outstanding). 

The National Debt Counsellors Association feel that NCA needs to be adjusted to actually allow for changes in Debt Counsellors.

‘unrealistic promises which will never come true’

Reinhard Pettenburger (DCASA) said the major issue is a rough Debt Counsellor trying to win over clients with lower repayments and these Debt Counsellors have all the info about the consumers recently established debt review. This is a big problem. They are told all sorts of unrealistic promises which will never come true

Question posed: Could the NCR send such consumers an info pack about the risks and limitations of a change in Debt Counsellor?

Timmy van der Grijp pointed out that no declaratory order can be issued since these things (transfers and DHS) are not yet included in the Act.

Qhamani Loni pointed out that other regulatory bodies could be included in combating false advertising. Legal societies can help monitor overcharging of legal fees etc. NCC can assist. Information Regulator (PoPi related). The issue touches on several Acts and several issues.

Some Debt Counsellors suggested referring complaints and concerns to the Information Regulator.

Timmy van der Grijp pointed out that regulators have to rely on their current infrastructure to try to keep up with the very fast changing industry. This can mean the Regulator might get left behind.

Some Debt Counsellors called on the NCR to increase their educational efforts. ACA can get involved. Broadcasters do not themselves know what constitutes false advertising.

Good Interaction and Engagement

There was some good interaction between all the different attendees and the speakers and panel. The well supported webinar was set up as a chance to air the issues and not necessarily resolve the issues. Some good suggestions were made and the matter will be further developed with the various Debt Counsellor associations and the NCR in the months ahead. 

The webinar closed with another thanks to sponsors ONE.