Tag Archives: over-indebted

NCT Rescind Order Sent To All Debt Counsellors

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NCT Adjust Ruling Previously Sent to All DCs

A while back, Debt Counsellors across the country suddenly received a copy of a National Consumer Tribunal (NCT) ruling in a case between some consumers and their Debt Counselling firm. This was very unusual. The firm is one of the largest in the country and the fact that the ruling seemed to indicate that they had not done their job 100% was not great for their reputation. But not all was what it seemed and sending the ruling out to all Debt Counsellors seems to have been premature (in retrospect) as the NCT has now rescinded and amended that ruling.

Part of the problem was that this large firm never received an invitation to attend the NCT case due to wrong email addresses being used to notify them that the consumers were asking the NCT to review their matter. This meant that the NCT ended up relying on only half the necessary information.

‘the NCT ended up relying on only half the necessary information’

Something else unusual that happened was that the initial NCT ruling ended up saying that the CEO of the NCR had to get a copy and implied that the NCR had to do something with the ruling to show Debt Counsellors what not to do (as if this big firm had made a mistake). Seemingly the consumers never asked anyone to do this.

The “oops” Ruling

When the NCT first heard the case, without the Debt Counsellors attending, they were asked by the consumers to rule that they were no longer over indebted (no longer needed debt review). This is a common challenge for consumers who wish to have the credit bureau listing for debt review removed. Credit bureaus only have one type of listing for anyone in debt review and the NCR have told them not to remove this listing quickly and without a lot of extra work (which is not required by the National Credit Act). The NCT heard the matter and worked with the information given.

The NCT also saw that the consumers had two accounts which had not been included in their original NCT debt restructuring consent order. The NCT are happy to grant consent orders* for debt review where all the consumer’s credit providers agree to a new adjusted debt repayment plan. It now seemed that the big debt counselling firm had somehow forgotten or ignored these accounts and thus the consent order was probably not valid (since there was no consent for those two other accounts).

This was why the NCT ruled that the consumer’s debt restructuring NCT ruling was not valid and that they were no longer under over indebted and under debt review.

The New Ruling

Once the Debt Counsellor found out about the matter (probably by getting an email about their case in their inbox like all the other Debt Counsellors in the country) they immediately went to the NCT and asked to present their side of the matter. They did not want to stop the consumers from exiting debt review but wanted to present the NCT with extra important info about how they had helped the consumer.

‘It turns out that the big debt counselling firm took over the consumers matter from another previous debt counselling firm’

It turns out that the big debt counselling firm took over the consumers matter from another previous debt counselling firm. Before they even got to handle the matter the two supposedly ignored accounts had been ‘terminated’ from debt review by the credit provider. If a credit provider doesn’t want to help a consumer through debt review they can send out a Section 86(10) notice and potentially start new legal action against the consumer (which the consumer can defend in terms of NCA Section 86(11) and have put back into debt review).

‘the two supposedly ignored accounts had been ‘terminated’ from debt review by the credit provider’

The big debt counselling firm had, in fact, made provision for paying these two accounts in the consumers monthly budget and had included all other accounts into the consent order which was then granted (and later rescinded). Because the two accounts had never been taken to another court for enforcement they were unable to help the consumer get these accounts put back into debt review. Thus they worked with all the other accounts and got consent.

This new NCT ruling then seems to show that as long as a Debt Counsellor brings all the accounts which they can work with in terms of the NCA (a Debt Counsellor cannot ask a court to rule on an account which is already potentially been taken before another court) the NCT can grant a consent order.

Consumers Get What They Wanted

This latest ruling still rules that the consumers are not over indebted and can leave debt review. This is what the consumers and their Debt Counsellor wanted for them. They can now use this ruling to try and force the credit bureaus to remove their debt review listing.

Debt Counsellor’s Reputation Restored

The Debt Counselling firm are happy too since they are now shown to have done a proper job. It is now clear that they were even helping tidy up somewhat after the previous Debt Counsellors. The new ruling also removes the need for the NCR CEO to have been informed and other Debt Counsellors to be told to avoid certain actions. This part of the ruling is a bit too late since the NCT already sent out that blast email to all their registered DCs. Probably the NCT will now send out another blast email with some clarification on the matter.

 

Consumers Want an Easier Way To Remove Credit Bureau Debt Review Status

Debt Counsellors work hard to help their clients leave debt review. They work hard to help their clients get rid of debt and get back on their feet. At present they struggle regularly to get the credit bureaus to remove the overly simplistic and problematic debt review listing that is made. Consumers who abandon either the services of their Debt Counsellor or who simply don’t stick to the debt review court order can get stuck fighting to get the NCR and credit bureaus to have that listing removed. This issue is negatively impacting on the popularity of debt review and will no doubt also be a challenge should debt intervention ever actually kick in. The matter has been somewhat addressed in guidelines issued by the NCR but the challenges still continue and no easy solution is in sight unless small amendments are made to the NCA or regulations. Unfortunately, the focus of those with the power to do so has been elsewhere and this issue has been repeatedly overlooked. For now, consumers and Debt Counsellors simply have to work a little bit harder in this regard.

 

 * The NCA Section referring to consent orders has not as yet been amended even though the NCA has had several changes made over the years. Specific reference to debt counsellors is still missing. Legislators have seemingly not felt the need to include the change since the NCT consent order process is already working so well.