NCR VS MUNSAMY

The complaint related to the Respondent failing to distribute payments to credit providers and not obtaining court orders. As a result, the complainant’s credit provider terminated the debt review process.

The investigation commenced in 2018, however the hearing only took place in September 2022 as a result of a long record of interlocutory applications.

The NCR Investigated certain Debt Counselling conduct and contraventions of the Respondent, they then lodged a complaint against the DC in the Tribunal.

The NCR alleged that the DC attempted to evade her responsibilities, by raising the fact that the consumers was supposed to and was eventually transferred to another debt counsellor within the organization (NDC).

However, the NCR argued her conduct during the period that the consumers were listed under her name had an impact on the consumers.

For interesting sake there was a few obiter dictums made, in that the debt DC raised that the Confirmatory Affidavit and Founding Affidavit was filed irregularly. The DC stated that each annexure to the Founding Affidavit had to be initialled. The NCT stated that it is not a requirement in terms of the law. The DC also argued that the confirmatory affidavits was signed after the founding affidavit and the NCT stated that it is not irregular.

 

1. To proceed to the merits of the case, the NCR firstly accused the DC of contravening General Condition 5 and 6 of the Conditions of Registration.

Which in essence states that the DC must at all times act in the best interest of a consumer and a DC must ensure that they inform the NCR if ANY changes in their employment has taken place. The NCR stated that the DC also failed to transfer the consumer successfully to her colleague (another DC within NDC).

The Debt Counsellor argued that her details never changed, she did not leave the employment of NDC, she purely sought to transfer the consumers. The request to transfer was sent to the NCR, who failed to affect the transfer.

The NCR could not explain or justify the delay in transfers.

As such the Tribunal could not find that the DC contravened Condition 5 and 6

(It is important to note from this case law, to always update your information if a change occurs, this can lead to an administrative penalty if not updated)

 

2. The NCR accused her of contravening General Condition 2, which in essence states that she delegated her primary duties as a debt counsellor to unregistered persons.

 

The NCR argued that as there were no notes from the DC, that she was not involved in the process.

The DC argued that they cannot be prohibited to make use of administrative staff, however she participated in the debt counselling duties.

The NCT found the DC as a reliable and truthful witness, who explained the process and proved that communication was sent to consumers to inform them of the process.

The NCT stated that there is nothing in the Act that compels a DC to document the discussion with Consumers, and the NCR cannot use that as a measure to state that the DC was not involved in certain steps of consultation.

The NCT stated that the only documents that are required to be recorded and kept per Regulation 55(1)(a) includes:

• 59.1 Applications for debt review.
• 59.2 Copies of documents submitted by consumers.
• 59.3 Copies of rejection letters (if applicable).
• 59.4 Debt restructuring proposals.
• 59.5 Copies of any order made by the Tribunal or the Court; and
• 59.6 Copies of clearance certificates.

 

The NCT mentioned any further recordings or communication the NCR requires to proof communication, needs to be included in the Act.

Furthermore the NCT reiterated to state that in the event that credit providers fails to consent to a restructure, the debt counsellor needs to consult with the consumer and the consumer must participate in good faith in further negotiations with the credit provider and comply with any reasonable request by the debt counsellor to facilitate a responsible debt re-arrangement plan with a credit provider.

If the consumer fails to participate in good faith, the debt counsellor cannot be held liable for the matter not going to court.

The NCT once again, in this Tribunal Order, reiterated that nowhere in act does it state that a matter has to be in court within 60 days (no statutory obligation, this is discussed a bit later).

The NCT found that the DC did not contravene the aforesaid conditions

 

3. The NCR followed by stating that the DC contravened the Act as she failed to submit her Form 17.1’s and 17.2’s within the prescribed days to all Credit Bureaus and Credit Providers. According to the NCR this conduct can have an extraordinary detrimental effect on the process.

The Applicant conceded n TWO matters the Form 17.1 was sent later as a result of administrative mishap and the NCT was satisfied that she contravened the act accordingly

 

4. The NCR alleged that the DC failed to file debt review court applications within 60 days. The NCT held that even though none of the matters before them was filed within 60 days, her failure does not constitute a contravention of the Act.

 

Paragraph 86 states the following

“Section 86(10)(a) outlines unequivocally that, while a credit agreement is reviewed as part of a debt review process, the consumer is expected to honour the credit agreement in place at the time. If the consumer defaults, such failure may expose the consumer to the possible termination of his or her debt review application by the credit provider. The debt counsellor cannot be held responsible for the failure of the consumer to make prompt payments in accordance with the credit agreement in place at the time. Therefore, the consumer must participate in good faith during the debt review process and ensure that the credit provider has accepted any recommended change in the monthly premium. To the extent that a change has not been accepted, the debt counsellor must inform the consumer. On the evidence before the Tribunal, the Respondent advised all consumers promptly when a credit provider did not accept a reduced monthly premium. The failure by the consumer to then adhere to the credit agreement premium that is in place cannot be attributed to the debt counsellor.”

The NCT states that a DC cannot be held liable for a consumer’s failure to adhere to the credit agreement or agreements made.

 

The NCT Order:

The NCT ordered a R10 000 administrative fine against the DC for the contravention of Forms not timeously sent to parties.

The DC attempted to claim that the NCR was vexatious in instituting legal proceedings against the DC.

The NCT however noted that it could not be proven, and that the NCR was able to prove one contravention.

It did however note that in many instances where the NCR argued contravention, they require legislative amendments to enforce such allegations.

Here is the full case law: 27.  27. NCR v A Munsamy 140432.2019.57