What Do ADRAs Do?
There are currently 7 NCR registered Alternative Dispute Resolution Agents in South Africa (Sept 2023).
These are known as ADRAs.
Some people get confused, but ADRAs are not the same as Debt Counsellors. Though both are found in the National Credit Act and are referred to in the scary Section 129 letters to consumers, they perform different functions.
ADRAs help deal with complaints or disputes about credit accounts.
Debt Counsellors help restructure debt repayments on credit accounts.
Any consumer can submit a complaint to the NCR about an alleged contravention of the Act or a complaint concerning an allegation of reckless credit (where the consumer didn’t understand what they were getting themselves into or were not fully informed of the obligations and cost or could not really afford to repay the debt).
However, as an alternative, Section 134(1)(b)(ii) of the National Credit Act (NCA) says that instead of filing reckless lending accusations or complaints to the NCR, these can rather be referred to an ADR for resolution of the disputes. This would possibly be done through conciliation, mediation or arbitration.
So, the two parties would basically discuss it with the ADRA (in one set up or another) and try to agree to a solution or have someone decide on a solution in the case of arbitration.
If they can’t agree then things would be referred to the NCR or even the NCT instead.
Mediation: is it just a different form of Debt Review?
You may have seen people offering to sort out consumers’ debt via mediation. This was popularised by the National Debt Mediation Association when the NCA and debt review was first introduced. As a result, many consumers were successfully diverted away from the legal debt review process at the time.
‘owing money is not a ‘dispute’ or a ‘complaint’
Obviously, actually owing money is not a ‘dispute’ or a ‘complaint’ (although we may complain about it to our friends). So, mediation by ADRAs would not cover restructuring debts.
‘mediation by ADRAs would not cover restructuring debts’
That would best be done via debt review or in a voluntary agreement with a credit provider by the consumer direct or via a Debt Counsellor as allowed for in the National Credit Act.
Note: Where mediation is done in regard to a single debt (not multiple) and were a dispute over some aspect of that account is involved changing the repayment amount by agreement “may” fall within the field of an ADRA. But some might argue that even this would be better handled by a Debt Counsellor. At present, this is one of the topics sitting with the Credit Industry Forum (CIF) who are trying to define guidelines relating to ADRAs. Regardless, it would certainly not involve multiple accounts from multiple credit providers. That’s debt review, plain and simple.
If you have a complaint about a credit provider then why not reach out to an NCR registered ADRA and see if they can help you and the credit provider resolve the matter rather than end up at court or in front of an Ombud or the NCT?