Benay Sager v National Credit Regulator – DHS updates

Benay Sager v National Credit Regulator (NCT/318886/2024/59(1)) [2024] NCT (Centurion)

Background

The National Credit Regulator (NCR) is in charge of the debt counselling industry and ensures compliance with the National Credit Act (NCA). As part of their registration, debt counsellors must keep consumer records updated on the Debt Help System (DHS).

In March 2022, the NCR changed how debt counsellors can update DHS status codes. Now, they must send documents via email for verification before any updates can be made, meaning they no longer have direct access to make those changes themselves.

One debt counsellor challenged this new rule in front of a Tribunal, arguing that the change violated his rights and made it harder for him to do his job. The NCR defended its decision, saying this new requirement was necessary to prevent misuse and protect consumers.

Key Arguments

Debt Counsellor’s Argument:

• The NCR changed his registration rules without following the correct legal steps.
• The NCR took on responsibilities that should belong to debt counsellors.
• This change makes it difficult for him to keep consumer records updated and fulfill his duties.

NCR’s Argument:

• The new rules were not a change in the registration terms for debt counsellors but rather a decision to prevent illegal practices, such as putting consumers under debt review without their knowledge.
• Debt counsellors can still update DHS status codes, but they now need to send documents for verification instead of doing it directly.
• This process helps prevent misuse while improvements to the system are made.

Tribunal’s Decision

The Tribunal sided with the NCR, stating that:
?? The NCR acted within its authority to regulate the industry and protect consumers.
?? The DHS database is a tool, not a right, and the NCR can control how updates are made.
?? The 2022 rules did not change the debt counsellor’s registration terms; they only changed how records are updated.
?? The counsellor’s appeal was not valid because he challenged the decision in the wrong way according to the NCA.

Final Outcome

• The Tribunal dismissed the appeal, agreeing that the NCR’s decision was fair and aligned with its duty to protect consumers.
• Debt counsellors must continue following the new procedure, which involves sending documents for verification before making updates to DHS.

Key Takeaway for Debt Counsellors:

Although the procedure has changed, debt counsellors can still update consumer records—they must now follow a process with more oversight to ensure better consumer protection.