CIF – DC Fee Review Feedback
DCASA attended the NCR Credit Industry Forum meeting on the 24th of January 2024 to discuss what is loosely called the DC fee review.
By way of managing expectations, it seems that the CIF are primarily intent on discussing the timing of DC Fees and not the actual fees themselves. We struggle to see how the two can be separated but that is their intent for the most part.
While there may eventually be some discussion about certain fees the NCR does not seem very keen on discussing the actual Rand’s & Cents. They seem primarily motivated to look at:
1) Legal fees – which they acknowledge they cannot really influence
2) Linking payment of the restructuring fee to particular benchmarks or work achieved.
While this may seem similar to what is currently in place, we wait to see if and how things develop. We all know that credit providers like to get some payment in Month 3 and do not like to see fees interrupt this arrangement.
As CIF starts discussing a topic, they like to set a “TOR” or Terms of Reference to try and frame future discussions. We have not been 100% happy with all the working in the TOR and asked for several small changes.
The NCR are worried about certain abuses but we are not sure yet how common they are.
As a concession to our requests, the NCR did say they will try to give us some stats relating to the things they say are happening in the industry that they worry about. Most CIF members agree that without the stats it is hard to know what we are talking about and how often certain problems are arising.
During the meeting, the NCR acknowledged that the presentation of the original TOR may have been perceived as abrasive to all debt counsellors. The NCR indicted that subcommittee’s intent is not only to address rogue DCs, but also to update the fee structure and possibly include additional fees and their payment structure in the new guideline.
When it comes to fees, we wish we could give consumers something easy to understand and something fair to our members.
The NCR did say that the actual monetary aspect of the fee review will eventually have to be discussed at a later stage, but they say this can only happen once we have agreed upon the structure or timing of fees. We hope that can be done by this sub committee in the future.
When we make submissions in the next phase of discussions we will be including suggestions about additional or updated fees for discussion (such as annual review fees, clearance fees, and reckless credit fees). We hope to see the hard work it takes for such things to be covered by fees.
While we understand that we do not have jurisdiction to discuss legal fees, we would like to gather information on the “average” costs of a debt review application (both opposed and unopposed) from attorneys.
This will help everyone in the sub committee when discussing legal fees that some practices supposedly charge to know if we are talking about a “normal” cost or a exorbitant charge. We also want to compare the work done for debt review with other types of litigation.
If you are an attorney (or work closely with an attorney for your debt review matters) and would like to participate in this exercise, please contact Vanessa at email@example.com.
We Are Proceeding With Cautious Optimism
We are currently waiting for the amended TOR and once all parties have agreed upon it, we will proceed with the discussion on the fee structure that will hopefully benefit all parties involved.
– Zak King (DCASA Representative)