OVERVIEW OF DEBT
COUNSELLING
PRESENTED BY KEDILATILE MALAKALAKA
SAFARI INTO CONSUMER CREDIT
15 OCTOBER 2014
STRUCTURE OF PRESENTATION
 INTRODUCTION
 DEBT COUNSELLING STATISTICS
 DEBT COUNSELLING CHALLENGES AND SOLUTIONS
 TRENDS AND INDUSTRY PRACTICES
 THE CREDIT INDUSTRY FORUM(CIF)
 NCR PROJECTS
 CONCLUSION
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INTRODUCTION
 The credit industry was large and firmly set in its ways prior to
the introduction of the National Credit Act (“the Act”).Over the
past six years, the industry has seen many changes and
initiatives particularly in the debt counselling space.
 Industry agreements were negotiated to address shortcomings
in the Act, problems with implementation of statutory provisions
and the judiciary has repeatedly changed the debt counselling
landscape.
 It is against this background that we now have the National
Credit Amendment Act.
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INTRODUCTION(continued)
 These amendments are intended to strengthen regulation to
ensure effectiveness of the NCAA and to fully achieve the
intended outcome of a fair, transparent and accessible credit
market in South Africa.
 For debt counselling, they have placed consumers in a more
protected space to efficiently address over-indebtedness and
will positively impact the role of debt counselors as the
custodians of the process.
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DEBT COUNSELLING
STATISTICS
TOTAL REGISTERED DC’S - 2183
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DEBT COUNSELLING
STATISTICS(continued)
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DC CHALLENGES AND
SOLUTIONS
CHALLENGE
SOLUTION
Loopholes in the Act
The National Credit Amendment Act
Process weaknesses
We established a forum called the
Credit
Industry
Forum(CIF)to
facilitate agreement and address
aspects of operational nature which
have a significant impact on the
debt counselling process. This
forum comprise of representatives
from the credit industry.
Lack of cooperation
stakeholders
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between CIF is also aimed at fostering cooperation amongst stakeholders.
DC CHALLENGES AND
SOLUTIONS(continued)
CHALLENGE
SOLUTION
Non compliance(At DC and CP Regular
level)
activities
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compliance
monitoring
Judicial intervention
Engagement with the provincial civil
court forums to discuss judicial
challenges and to find workable
solutions (e.g. Uniform guidelines
which if available are disseminated
to DCs).CIF is currently working on
a solution to approach this at
national level.
Consumer behavior
Awareness
campaigns.
and
educational
TRENDS AND INDUSTRY
PRACTICE
 DCs listing consumers under debt counselling without their
consent.
 Soliciting of debt counselling applications. DCs buy a consumer
list from an unknown source and contact them to offer debt
counselling.
 The use and sharing of registration number with unregistered
individuals.
 Misleading marketing by debt counsellors (e.g. advertising that
instalments can be reduced up to 50%)
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TRENDS AND INDUSTRY
PRACTICE(continued)
 Proactive approach to debt counselling by credit providers as a
relief measure for consumers.
 Consumers making payments
numbers and not following up.
using
incorrect
reference
 An increase on the number of transfers from one DC to the
other.
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THE CREDIT INDUSTRUY
FORUM
1.PURPOSE
 To facilitate agreement and address aspects of operational
nature which have a significant impact on the debt counselling
process.
2.COMPOSITION
 This forum comprise of NCR and Association representatives
from the credit industry.
 Independent registrants participates by means of written
submissions.
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THE CREDIT INDUSTRUY
FORUM(continued)
3.PROJECTS
 Task team agreements of 2010-The subcommittee was
established to review recommendations in order to issue as
guidelines. The process was finalised and guidelines to be
issued in due course.
 End balance difference-The subcommittee was established to
develop a paper providing a solution on how disputes relating to
end balances should be treated. The proposed position paper
was piloted with system providers, debt counsellor and credit
providers and will be presented at the next CIF scheduled for
sign off.
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THE CREDIT INDUSTRUY
FORUM(continued)
 Withdrawal from debt counselling- CIF subcommittee due to
differing opinions recommended that NCR seek legal opinion
and the opinion was received and deliberated on by the
subcommittee on 14 October 2014.
 Insurance whilst under debt review: The sub-committee
developed a position paper which is in the finalisation phase on
the process to ensure that insurance premiums are maintained
throughout the debt counselling lifespan.
 DCRS- Subcommittee is looking into operational issues as well
as the hosting and management of the system with the objective
of increasing usage by industry participants.
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PROJECTS BY NCR
 Guidelines on the application of section 103(5).
 Review of industry codes of conduct.
 Amendment of the current training course for prospective debt
counsellors to include amendments and latest developments.
 Exploring ways to extend and register the current debt
counselling course as a qualification to benefit both aspirant and
registered debt counselors.
 Annual DC campaign informed by the latest developments in the
industry.
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CONCLUSION
 Our vision is to implement and maintain debt counselling as a
sustainable debt relief measure that leads to rehabilitation of
over-indebted consumers without prejudice. A vision that we
cannot achieve on our own but through open dialogue such as
this and cooperation by all role players.
 We will offer continued support to all role players to ensure that
debt counselling is indeed an effective debt relief measure by
serving its intended purpose.
THANK YOU
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