Reading Time: 3 minutes

Overwhelmed By Transfer Requests

Debt Counsellors are getting requests from other Debt Counsellors with a reputation for offering get out of debt review scams.

The National Credit Regulator recently met with representatives of the two main Debt Counsellors associations about the topic of transfers.

Protecting Consumers Or Messing With Their Rights?

When the National Credit Act was written, it was envisaged that consumers would sign up with a Debt Counsellor and complete the entire debt review journey with them.

Over time, it became clear that due to a variety of circumstances it might be necessary for a consumer to transfer from one Debt Counsellor to another. 

For example, a Debt Counsellor could die, could emigrate, could go out of business, or could hand over part of the work of the review to another Debt Counsellor. 

With this in mind, the NCR issued guidelines about transferring consumers from one Debt Counsellor on their NCR Debt Help database system to another Debt Counsellor.

Scammers & Empty Promises

Over time, there has been an unsavoury element that has entered the debt review industry, with some Debt Counsellors only signing up to act as a front for practices that offer to remove people from debt review.

While this is possible if a person has paid up all their debts in full, some scammers or churn mill Debt Counsellors charge large amounts to get people out of debt review when it is not actually possible.

Some banks have made this situation even more common by sending clients bad messages about debt review or encouraging people to leave debt review. They have helped drive consumers into the arms of scammers who illegally charge up front for such so called services.

The NCR has been in an ongoing battle to identify such scammers and take them to task.

Many Debt Counsellors Now Refuse

With scams becoming more common, it is harder and harder for hard working Debt Counsellors to know if a scammer is sending a request or if the consumer genuinely wants to transfer.

It has become common recently for many larger debt counselling practices, when receiveing a request to transfer, to send a detailed letter to the consumer about the dangers. Warning them abotu scams, warning them that court orders are in place, warning them that credit providers may take new legal action if payments stop or are interrupted.

This has upset some of the scammers, churn mill operators and no doubt some consumers who do really want to switch to another Debt Counsellors.

It’s a catch 22 situation, the Debt Counselling associations want to cooperate with the NCR and help consumers, but they also want to protect consumers from abuse. This has thrust them into a difficult situation.

These topics and more were on the table during the discussion with the NCR. The tone was friendly and one of cooperation rather than confrontation.

The NCR reported that they are not only busy with big cases lined up at the National Credit Tribunal (NCT) but also have documents in development that could be shared with consumers. Such matters take time, however and would be risky to rush and get wrong.

It seems that the NCR and Debt Counsellors are closely aligned on one thing: 

protecting consumers!