FAQs

Consumer FAQs

1How do I lodge valid complaint against a registered Debt Counsellor or Credit Provider?

If you have a complaint regarding your Debt Counsellor please contact your Debt Counsellor directly. If the matter remains unresolved please contact the NCR directly. You can contact the NCR on 011 554 2600 or 0860 627 627 or send an e-mail to dccomplaints@ncr.org.za

If you have a complaint regarding a Credit Provider please contact the Credit Provider directly. If the matter remains unresolved please contact the NCR directly. You can contact the NCR on 011 554 2600 or 0860 627 627 or send an e-mail to complaints@ncr.org.za

To speed the process up, complete the attached Form 29 and send it to the NCR.

Also visit: http://www.ncr.org.za/sd-complaints

DCASA does not have the judicial power to adjudicate complaints against Debt Counsellor’s or Credit Providers.

Any industry or general Process issue can be referred to DCASA for possible discussion and Industry forums.

Please view document here: Form29

2I Have paid up an account in terms of my Debt Review Court Order, however there is still an outstanding balance on the credit providers books?

Please see attached Newsletter for explanation: 17thEditionConsumerNewsletter

3My debt counsellor failed to reduce my Interest Rates?

In terms of the Act, a Credit Provider is not obliged to consent to reduce interest rates.

  • Unless a Credit Provider consents to the reduction of an interest rate; or
  • If your Debt Counsellor make use of the DCRS systemindustry concessions may be applicable in terms of lower interest rates and/or fees. In terms of the Task Team Guidelines issued by the National Credit Regulator a Credit Provider is obliged to accept a valid DCRS proposal.
4Why did my Debt Counsellor take my monies when I started Debt Review and not pay Creditors?

Firstly, a Debt Counsellor is not allowed in terms of the National Credit Act to collect Debt Review Payments. Payment can be collected by a Registered Payment Distribution Agent (PDA) who will collect a single payment and distribute payments to all Credit Providers.

In terms of the Deb Counsellor Fee Guidelines, issued by the National Credit Regulator, the first amount deducted from your account will be paid to the Debt Counsellors for his fees up to a maximum of R 6000.00. Usually, in practice, the 2nd and 3rd months, in some cases, monies debited from your account will be paid towards your legal fees.

5I have cancelled my Debt Review, but my name is still flagged on the Credit Bureau.

****** Update: In early 2018 new High Court Judgments stated that a Consumer is no longer in a position to exit Debt Review once a Court Order is in place, except by Section 71 of the NCA proceedings. We are still waiting for the NCR to issue updated Withdrawal Guidelines.

Old post....

Prior to February 2015, if a Consumer elected to cancel his/her debt review after a Form 17.2 was issues he/she was entitled to do so and the debt review flag was removed from the Credit Bureaus.

However, in February 2015 the National Credit Regulator issued “Guidelines for the Withdrawal of Debt Review – 002/2015” and shortly thereafter the National Credit Regulator issued “Explanatory Note to the Withdrawal Guidelines” which set out the following scenarios and the manner to cancel your Debt Review effectively.

In short, these Guidelines states the following:

1. A Consumer cancelled before a Form 17.2, recommendation of declaration of over indebtedness, is issued: In terms of the guidelines a Consumer is entitled to withdraw from Debt Review prior to a Form 17.2 declaration of over indebtedness be sent to Credit Providers. This step is usually completed within 20 days (or less) after the Consumer applied for Debt Review. There will be no Debt Review Flag on the Credit Bureau.

2. A Consumer cancelled after a Form 17.2, recommendation of declaration of over indebtedness but before a Court Order is obtained:

The Debt Counsellor has statutory power to recommend that a Consumer be declared over indebted (by way of a Form 17.2) and a Magistrate the power to declare a Consumer over indebted.

The Withdrawal Guidelines states that once the recommendation of over indebtedness is done the Consumers name will be flagged as over indebted on the Credit Bureau’s .

In order to cancel the Debt Review effectively a Consumer should approach the Court to be declared “not over indebted” and “no longer under debt Review” and not just inform the Debt Counsellor that he/she is cancelling.

This Court Application should be done in accordance with Section 87(1)(a) of the National Credit Act asking the Court to reject the Debt Counsellors recommendation of over indebtedness.

The Application should contain the Consumers financial circumstances at that time and should motivate as to why the Consumer is no longer over indebted and no longer required to be under Debt Review.

If the Application is successful this will cause the Credit Bureau flag to be uplifted.

ALTERNATIVELY you should repay all your debts, except your Mortgage Bond, and approach the Debt Counsellor to issue you with a clearance certificate in terms of Section 71 of the National Credit Act read together with the National Credit Regulators “Interpretation of Section 71 of the NCA” Guideline circulated in March 2017.

3. A Consumer was declared Over Indebted by a Court Order:

As there is a Court Order it should be rescinded. A Consumer should apply to Court in order to rescind the existing Court Order. A rescindment should contain the existing Court Order together with the fact that the Consumer was found to be over-indebted, however at this stage the Consumer is no longer over indebted and the Consumer’s financial circumstances should be contained the rescission application as motivation. The Consumer must advise the court that he/she no longer needs to be under Debt Review.

If the rescission is successful the Court Order should be served on all Credit Providers and the Debt Counsellor should lift the debt review flag from the Credit Bureau.

ALTERNATIVELY you should repay all your debts, except your Mortgage Bond, and approach the Debt Counsellor to issue you with a clearance certificate in terms of Section 71 of the National Credit Act read together with the National Credit Regulators “Interpretation of Section 71 of the NCA” Guideline circulated in March 2017.

Debt Counsellor FAQs

1When is the best time to join DCASA?
  • As soon as you are registered as a Debt Counsellor.
  • If you are a staff member of a Debt Counsellor.
2When can debt be excluded from Debt Review?.

The NCA’s intention is clear on this issue:

  • The process starts with the Consumer providing information as set out in Regulation 24(1).
  • In terms of Regulation 24(b)(iv) the Consumer is required to list all debts, disclosing monthly commitment, total balance outstanding and amount in arrears on all debt. In terms of Regulation 24(b)(vii) the Consumer consent that a Credit Bureau check may be done.
  • In terms of Regulation 24(2) the Debt Counsellor must within five days after receiving and accepting the application for Debt Review notify all Credit Providers listed on the application form, supplied by the Consumer, and the Credit Providers listed on the Credit Bureau.
  • In terms of Regulation 24(3) the Debt Counsellor must verify the information by contacting the Credit Provider or Consumer or use any other verification method. In terms of Section 24(4) the Debt Counsellor may accept the information supplied by the Consumer as correct if the Credit Provider fails to provide the requested information.
  • In terms of Regulation 24(7) the Debt Counsellor must assess the Consumer’s application in terms of Section 86(6)(a) and in this process must refer to the requirements of Section 79 together with Regulation 24(7)(a) - (c).
  • In terms of Section 79 a Consumer is over-indebted if the preponderance of available information at the time of the determination is made indicates that a Consumer is or will be unable to satisfy in a timely manner all obligations under all Credit Agreements to which the Consumer is a party to.
  • Section 86(2) specifies which Credit Agreements must be excluded from a Debt Review applications. If a Consumer is in default under a Credit Agreement and the Credit Provider has proceeded to take steps contemplated in Section 130 to enforce that agreement. This Section provides protection to the Credit Provider as envisaged in Section 2(1) of the NCA which stipulates that the NCA should be interpreted to give effect to the purpose of the Act in Section 3. Section 3 read together with the long title of the Act promotes fairness and equality.
  • A Credit Provider may also terminate the Debt Review in terms of a specific Credit Agreement, in terms of Section 86(10), if 60 business days has lapsed and the Consumer is in default under that Credit Agreement. When a Debt Review in terms of a specific Credit Agreement has been successfully terminated that Credit Agreement is excluded from the Debt Review unless resumption of the Debt Review is ordered in terms of Section 86(11).
  • When enforcement action commences Section 85 makes it possible for Consumers to utilize the relief provided by the Debt Review Process in terms of Section 86. A Court may, in terms of Section 85, refer the matter to a Debt Counsellor.
  • In summary, the Consumer is required to declare all debt and where this has not been done the Debt Counsellor should obtain this from the Credit Bureau report. The Consumer’s over-indebtedness is as a result of all debt (not a selected few). The NCA makes provision for certain debt to be excluded in Section 86(2) and it is the intention of the NCA that all remaining debt be included. Unless all these debt form part of the debt rearrangement process it may be rendered a futile exercise. This was clearly not the intention of the NCA.
  • A Debt Counsellor’s powers are limited to the powers set out in the NCA. This means a Debt Counsellor is not entitled to exclude a Credit Agreement from Debt Review.
  • Section 87 provides for the Debt Counsellor to make a proposal to the Magistrate Court. The Magistrate is a Creature of Statue and the possible relief is defined in 86(7)(c).
  • In Section 86(7)(c) provision is made for one or more of the Credit Agreements to be re-arranged. This provision should however not be construed that an agreement that is not re-arranged is then excluded from the Debt Review.
  • Section 86(7)(c) does not make provision for the Magistrate to exclude the Credit Agreement from Debt Review.
  • A Court is a Creature of Statue and is limited to exercise the powers in terms of Section 87. The Court will therefore not be entitled to order that any Credit Agreement be excluded from Debt Review.
  • The NCA specifies that all Credit Agreements should be included and makes specific provision for when a Credit Agreement may be excluded. This view is reinforced by having regard to the provisions of Section 79(1), where the concept of Consumer over-indebtedness is set out, when it refers to all obligations under all Credit Agreements.
  • Debt Review therefore include all debt unless it has been excluded as set out in Section 86(2) and the NCA does not make provision or authorise any person to exclude any debt from the Debt Review.

A Debt Counsellor’s powers are limited to the powers set out in the NCA. This view was clearly outlined in the NCT Judgement attached hereto. A Debt Counsellor is therefore not entitled to exclude a Credit Agreement from Debt Review. This would include:

  • If the repayment proposal is opposed by a Credit Provider that debt cannot be excluded from Debt Review.
  • A Credit Provider cannot refuse to include a Credit Agreement or issue a “instruction” to exclude a Credit Agreement. Recently some Credit Providers “instruct” Debt Counsellor to exclude Credit Agreements that has been entered into during the 12 months preceding Debt Review.
  • Some Debt Counsellors exclude a Joint bond where the Consumer is the main payer (A Debt Counsellor is not entitled to exclude a Credit Agreement from Debt Review) or a second property or vehicle.

The NCA stipulate when a Credit Agreement can be excluded. This includes Section 86(2), 86(10) and Section 88(3).

The action of Debt Counsellors and Credit Providers to exclude Credit Agreements outside the provisions of the NCA appears to be a non-compliance to the NCA, as stated on the NCT Judgement.

In this matter the NCT approved a Rescission Order due to the fact that not all Credit Agreements were included in the Debt Review.

In this matter the Tribunal referred the exclusion of Credit Agreements to the NCR with a request for steps to enforce compliance.

See attached full Tribunal Judgment:

3Will I get industry information if I am a member?

Yes, you will receive a newsletter, be able to join meetings, attend the annual conference, attend DCASA webinars and submit questions to DCASA.

4Will DCASA assist with staff training?

Yes, you can register your staff and this will enable them to attend meetings and DCASA Webinars.

5How do I FastTrack my knowledge about the Debt Counselling Industry?

If you are a DCASA Member you are in the best position possible to receive industry information and update as soon as it happens.

6Customary Marriages and the Effect thereof on Debt Review.

Customary Marriages and the Effect thereof on Debt Review.

One of the most important question in debt review is whether your client is married and if so whether he/she is married in community of property or out of community of property. As the answer would determine whether it will be a joint or single debt review application.

However, in our diverse country, we fail to take into account customary marriages and the practical implications thereof in debt review.

South Africa recognised this form of marriage on 15 November 2000 by the enactment of the Recognition of Customary Marriages Act. This includes recognition of customary marriages which was entered into prior to the enactment of the Act.

A customary marriage is when people get married under customary law and have complied with the following requirements:

  • Both parties should be above 18 years old;
  • Both should consent to the marriage; and
  • The customary marriage should be negotiated, celebrated and entered into in accordance with customary law.

The Act also requires the marriage to be registered with the Department of Home Affairs within 3 months since celebrating the marriage. The Act also requires the existing customary marriages, which was entered into prior to the Act to be registered.

A customary marriage entered into would have the same effect as being married in community of property, unless the parties entered into an Ante Nuptial Contract, which would deem the marriage to be out of community of property.

It is important to note that where there is only one husband and one wife, the failure to register the customary marriage at the Department of Home Affairs, does not invalidate the customary marriage.

However, if for example, the husband elects to enter into a further customary marriage with another woman. The Act compels the parties to register the marriages with the Department of Home Affairs. The reason being, that the matrimonial property consequences of each marriage must be regulated by a written agreement / contract, the husband should apply to Court to approve the written contract. The Court must ensure that each wife’s property interest is protected.

Accordingly, the effect that a customary marriage would have on a debt review application is the following:

  1. If entered into before the Recognition of Customary Marriages Act (RCMA) and there is only one husband and one wife and the marriage has not been registered, the parties are regarded as married in community of property and both spouses should jointly apply for debt review.
  2. If entered into after the RCMA and there is only one husband and one wife and the marriage has not been registered the parties are regarded as married in community of property and both spouses should apply jointly for debt review.
  3. If entered into after the RCMA and the spouses entered into an Ante Nuptial Contract and registered the marriage within the three month period, the marriage would be regarded as a marriage out of community of property and it is not necessary for a joint application.
  4. If entered into after the RCMA and there is only one husband and wife and the marriage has been registered within the required three month period, the marriage is regarded as in community of property and both spouses should apply jointly for debt review.
  5. If entered into after the RCMA and there is more than one wife or husband and the marriage has not been registered within the three month period, the marriage is not recognised and the parties are not seen as married.
  6. If entered into after the RCMA and there is more than one wife or husband and the marriage has been registered AND a contract / written agreement regulating the property consequences of the marriages has been made an order of court. You should request copies of the court order to determine whether the marriages are in or out of community of property, which will determine whether the application should be a joint application or not.
7Section 126B - Prescription

SECTION 126B – PRESCRIPTION

The Prescription Act, Act 68 of 1969 commenced on 1 December 1970.

The basic principle most Consumers are aware of, is that debt shall be extinguished by prescription in certain instances, namely:

  • 30 years iro mortgage bond, judgment debt, debt iro taxation imposed and debt owed to the State;
  • 15 years iro debt owed to the State;
  • 6 years iro debt arising from a bill of exchange;
  • 3 years iro any other debt.

According to Section 12 of the Act, prescription will commence once the debt is due. Section 14 of the Act further states that interruption of prescription may occur when liability has been acknowledged, and prescription may start afresh once it has been acknowledged.

Judicial interruption may also occur, in accordance with section 15 of the Act, stating that judicial interruption occurs when a summons is served on a debtor for the debt owed.

However, section 15(2) states that if such a process has not been successfully prosecuted to final judgment the “interruption” shall be deemed to lapse and prescription shall not have been deemed to have been interrupted, subject thereto that the debtor does not acknowledge liability.

In most cases a creditor can proceed to claim outstanding debt that became due, even after prescription has taken place. The onus is on the consumer to “raise the defence of prescription”.

However, in March 2015, the National Credit Amendment Act came into operation, one of the most notable amendments was Section 126B(1)(b) of the National Credit Act 34 of 2006 (“the NCA”). Which states the following:

“No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies-

  1. which debt has been extinguished by prescription under the Prescription Act 1969 (Act 68 of 1969); and
  2. where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise”

Therefore contrary to the above principle, where prescription can be interrupted once a Consumer acknowledged liability after prescription has run its course, a credit agreement which falls within the ambit of the NCA in terms of Section 126B(1)(b) debt may not even be collected upon once the debt has been extinguished by prescription.

Further note that Section 126B(1)(b) does not apply retrospectively on NCA credit agreements, for a more in depth discussion regarding retrospective application, please go to the library section of the website where the applicable case law has been summarised – Kaknis vs Absa Bank Limited & Another.

The full Prescription Act has also been uploaded on the DCASA website, under the library section.

Vanessa Johst

Looking for something else? Feel free to contact us if you have any questions or enquiries.