NCR Endorse 17.3 Process For Those Under Pressure From Lockdown
NCR Issue Circular on Form 17.3 (Change in Consumer Circumstances)
The National Credit Regulator (NCR) has sent out a circular to Debt Counsellors in regard to the use of an industry-created form commonly called a Form 17.3. This is not one of the official forms found in the National Credit Act (NCA) but was created by those in the industry to try to communicate with each other when a consumer in debt review‘s circumstances changed dramatically and they would not be able to make the usual debt review payment (as per the plan or court order).
‘at the moment there are a lot of consumers with changed circumstances due to the national lockdown’
Covid-19 & Lockdown
Obviously, at the moment there are a lot of consumers with changed circumstances due to the national lockdown and also the slowdown in business due to the spread of the Covid-19 Pandemic. The banks have asked that Debt Counsellors approach them on behalf of consumers in debt review with a form 17.3 and proof of the consumers changed circumstances (such as a letter from their boss, some bank statements if self employed or perhaps just a letter or affidavit). The banks have then offered to look at the consumer’s situation and probably (99% of the time) extend the repayment terms by 3 months just like the banks are doing for those outside of debt review.
Obviously, consumers in debt review also have options in regard to claiming on credit linked insurance (if their policy wording allows) and this should be taken into regard. See More Here.
One of the challenges is that the NCA does not easily allow for changes to a debt review application and debt repayment plan once a court order has been granted. The court order will have the figure and amount of months the debt needs to be repaid over. So, in theory, if a change were to happen the consumer would need to go back to court and have the court order amended. This would of course, cost money to do so and where would that money come from? The consumer’s monthly debt repayment amount would be the only available source. So, the application to the court would have to show that these funds are used and also that the consumer’s situation has changed and asking for a new arrangement.
‘Credit providers have pushed for annual reviews of the consumer’s debt and income situation, which would mean annual trips to the courts’
This has been a challenge over the years. Credit providers have pushed for annual reviews of the consumer’s debt and income situation, which would mean annual trips to the courts, which would mean each year the consumer would skip several payments to pay the attorneys to change the form to make small changes. This seems problematic and would hurt the credit provider and the consumer who just want to settle the debts speedily.
This topic has been discussed at the NCR run Credit Industry Forum where various industry parties have made suggestions and the NCR has now published these agreed upon industry role player suggestions as a suggestion of their own (or guideline). You can download the circular below.
It sets out various situations that may arise such as a change right at the start of the process, in the middle of the process, before the court application or after it, if the consumer loses their job entirely or goes on maternity leave etc.
Download the Circular & Form
You can download the NCR circular and the annexures below.
Circular 3 of 2020( Change in Circumstance)