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What's Going On?

Debt Counsellors have recently been faced with an unusual and confusing situation. 

Some have received letters giving conflicting instructions about where certain clients’ debt review payments to RCS should be sent.

For some time, these particular payments have been made to RCS via Consumer Friend. Now, some Debt Counsellors have received instructions indicating that payments should instead be made to a different bank account linked to MBD.

This has left many wondering what to do next.

Changing Account Details

At first glance, any request to change bank details raises alarm bells.

Consumers are constantly warned by Debt Counsellors about scams where criminals try to redirect payments into fraudulent accounts. So, it is understandable that some Debt Counsellors paused before making any immediate changes.

At the same time, credit providers do sometimes sell books or appoint new collection agents. That part is not unusual in the credit industry. It has happened before.

The challenge comes when instructions appear to conflict.

Some Debt Counsellors who wanted to comply with the new letters approached their Payment Distribution Agents and software providers for help. Changing banking details for one client is simple enough. Changing them for many clients at once is more complex and they have wanted help to do so. Others have taken a cautious approach and are waiting for clarity before making any adjustments.

What Happened?

In June 2025 RCS sold to MBD Legal Collections Proprietary Limited (a registered Credit Provider) (MBD) certain Debtor Accounts under Debt Review.

At that time, Consumer Friend, well known credit agents in the debt review industry, were collecting the debts and continued to do so.

In February 2026, a notification was sent from MBD LC, an NCR registered credit provider, and the creditor and owner of the debts have appointed Capital Data (a division of Nutun) to manage the debt review process on its behalf and to liaise with the nominated Debt Counsellors through the entire debt review process. 

Then, days later in February 2026, Consumer Friend shared an industry letter saying that ‘a dispute had arisen between Consumer Friend and MBD LC regarding whether and on what basis, any change may lawfully be implemented at this stage to the established payment-routing and administration arrangements applicable to the RCS debt review accounts.’

The Positions of the Parties

Though MBD can obviously not comment on the nature of the ongoing dispute between themselves and Consumer Friend, their position on what to do about payment is understood to be the following:

MBD Legal Collections acquired a portfolio of debt from RCS in September 2025. MBD Legal Collections, as the registered creditor, is lawfully entitled to receipt the funds due to it.  

There exists no basis in law for a Debt Counsellor or Payment Distribution Agent for refusing to change the payment regime as directed by a credit provider.

There are no obligations on Debt Counsellors or Payment Distribution Agents to pay anyone other than the creditor, unless so instructed by the creditor concerned.

It seems to us that it would be unlawful, reckless, and a breach of the Debt Counsellor’s duty to creditors and the debtors if they were to act contrary to the express instructions of the creditor regarding payment.

It would place the Debt Counsellors, Payment Distribution Agents, and debtors at risk since payment to a party other that the creditor would not discharge the debt owing to the creditor.

Even if a third party asserts a contractual right between it and the creditor to receive payment on the creditor’s behalf, it is for that party to assert its rights in a Court against the creditor.

It would indeed be unreasonable to expect Debt Counsellors or Payment Distribution Agents to resolve such disputes and will indeed expose the entire industry to massive risk if other parties are allowed to influence the flow of funds. 

In summary, in the absence of a directive to the contrary from a creditor, Debt Counsellors and Payment Distribution Agents must effect payment to the registered creditor.

 

Though Consumer Friend can obviously not comment on the nature of the ongoing dispute between themselves and MBD,  Consumer Friend’s position is understood to be the following (extracts from their letter dated 10 Feb 2026):

‘Consumer Friend’s position is that, in terms of the applicable servicing arrangements, it is mandated to continue receiving and processing the PDA payment flows of the RCS debt review accounts.

In these circumstances, and to avoid confusion, inconsistent instructions and disruption to repayment plans pending resolution of the dispute, Consumer Friend requests that the status quo regarding payment-routing and administration in respect of the RCS debt review accounts be maintained and that no switch-over or re-routing be implemented on 16 February 2026’ [Note: this was the date that Debt Counsellors were asked to move payments over by]

Also, Consumer Friend stressed that their correspondence was ‘made for operational continuity only and is not intended to disparage any party’.

Both Points of View

There you have both points of view on the matter.

As is often the case in industry disputes, each party strongly feels they are acting correctly within their mandate and rights, and it may eventually come down to some form of arbitration, mediation or legal action to sort things out.

Since these parties often work closely together to collect funds for mutual clients or one another, it is no doubt a strange and uncomfortable situation for everyone.

Pressure and Concerns

What has unsettled some Debt Counsellors is dealing with the pressure to make adjustments.

Some correspondence, reportedly sent via Webber Wentzel, warned that failure to cooperate with MBD’s demands could result in complaints being lodged with the National Credit Regulator and calling for deregistration. For business owners who have built practices focused on helping over indebted consumers, that kind of letter can feel super intimidating.

At the same time, it may not be entirely fair for Debt Counsellors themselves to accidentally pressure PDAs to universally resolve the issue in one go for all their clients. After all, Debt Counsellors are the ones who must give formal instructions to PDAs on behalf of their clients. If there is uncertainty about who should receive payment, the responsibility ultimately rests with the Debt Counsellor to make a decision based on the information available.

Debt Counsellors have asked various parties for clarity, support and answers. They do not want to upset people they work with daily or accidentally cause any issues for clients somehow.

What Now?

The National Credit Regulator has reportedly been informed of the situation.

There are indications that efforts may be underway to encourage the parties to resolve the matter between themselves.

In the meantime, some Debt Counsellors have made the change. Others have decided to wait for clearer guidance.

What happens next is a little murky. What is clear is that conflicting instructions create uncertainty, and uncertainty is pretty uncomfortable in a highly regulated environment where compliance matters.

All parties no doubt hope that the situation is sorted out soon.