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Industry News

A recent NCT ruling has set the industry astir as it may redefine what acting in good or bad faith in debt review involves.

An upset consumer took a complaint to the NCR who had a look at the matter and then decided they had to side with the Debt Counsellor in the matter. As such, they told the consumer that if he was still unhappy he could take the matter directly to the National Consumer Tribunal (NCT) and ask them for some relief.

The consumer did approach the NCT and told them he was unhappy with how his matter was handled. The Tribunal made some interesting comments and ultimately ruled that the Debt Counsellor had not stuck to the terms of his registration. The NCT however did not feel it warranted any fines or deregistration but told the consumer that they could proceed to court and take their ruling with and try to claim damages from the Debt Counsellor there.

This story will be covered in more detail in the upcoming issue of Debtfree Magazine (issue 11 of 2022) if you would like some more info about the specifics of what the claims were etc.

Bad Faith?

One of the standout points from the case is that the consumer (1) refused to pay the original calculated amount which would cover all their debts in a reasonable time frame and asked for a further reduction (2) missed payments towards his credit providers during the debt review and (3) did not cooperate with the Debt Counsellor (and attorney) in sending them needed documents for the court process.

What is however interesting is that the Tribunal mentioned that the consumer had acted in good faith in the process.

 ‘it has long been accepted that if a consumer does not pay towards their debts…they are not acting in good faith’ 

Traditionally, it has long been accepted that if a consumer does not pay towards their debts or Debt Counsellor or if they refuse to provided needed documents they are not acting in good faith and a Debt Counsellor may withdraw from assisting the consumer.

The ruling has left many Debt Counsellors concerned about consumers who may sue them in civil court even if they do not make the required debt review payments.

 

Check out the article in this month’s issue of Debtfree Magazine to find out more.