DEBT COUNSELLORS ASSOCIATION OF SOUTH AFRICA
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February 2020 - 55TH EDITION
DEBT COUNSELLORS ASSOCIATION OF
SOUTH AFRICA
NEWSLETTER
NATIONAL CONSUMER TRIBUNAL JUDGMENT:-
DEBT COUNSELLOR DE-REGISTRATION AND
ADMINISTRATION FINE
The Registered Debt Counsellor was investigated
by the NCR for contravention of the National Credit
Act and her Conditions of Registration, as far as it
related to her duties as a Debt Counsellor. The NCR
lodged a complaint at the National Consumer
Tribunal to make a finding on the conduct of the
Debt Counsellor.
The National Consumer Tribunal found that the
Debt Counsellor had contravened the NCA and the
Conditions of Registration, in that she:
Allowed unregistered person to perform debt
counselling services through a call center, a DC
should diligently and carefully oversee the entire
debt review process.
Should have refrained from declaring a person to
be over indebted prior to verifying the
Consumer’s financial information.
Should have refrained from placing a person to register a Consumer on the DHS system and
under debt review without consent or having update on regular basis.
received a completed Form 16.
Should maintain adequate records and keep
Need to follow and submit prescribed forms
relevant copies of documents.
within the prescribed time limits, copies of the
Must act professionally, reasonably, timeously
forms and proof of delivery should be kept for
and fairly and must not bring the NCR or debt
record purposes.
review into disrepute.
Failed to timeously refer matters to Court /
Tribunal within the 60 day period and keep Has to perform her duties in a manner which is
proper records of the matters. consistent with the purpose and requirements
Should comply with the NCR’s requirements of the Act .
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Should keep the Consumer informed throughout
the different stages of debt review;
Failed to adequately inform the Consumer of the
consequences of entering into debt review.
National Credit Regulator v Lamara (NCT/102200/2018/57(1))
[2019] ZANCT 180 (13 December 2019)
This matter is a good example of practices a Debt
Counsellor should avoid, if there is uncertainty
please contact dcasa@dcasa.co.za for guidance. In
addition, we urge our members to comply with
their Conditions of Registration as well as the
National Credit Act. We strive to enhance the Good news from African Bank for South African
reputation as DCASA members to ensure that consumers
compliant Debt Counselling service are always African Bank is now offering unlimited access to
offered by a DCASA member. their detailed credit report through an innovative
partnership with TransUnion Credit Bureau. We
have taken away the challenges of accessing the
information and now anyone can easily access a
free credit report regularly on the African Bank
App or internet banking site. It is the start of our
journey to empower consumers on the
importance of their score on their own credit
journey and help them maintain a good profile.
Consumers simply need to first register on
www.africanbank.co.za and then, with one click,
they will be able to get their free credit report and
check their score regularly.
SHOPRITE INVESTMENTS VS NCR (FULL BENCH
PRETORIA HIGH COURT JUDGMENT)
The NCT found Shoprite to be in contravention of
the NCA as it engaged in reckless lending. Shoprite
was fined R 1 million. Shoprite took the matter on
appeal and a full bench confirmed the NCT’s
finding, in so far as it relates to Shoprite engaging
in reckless lending. The Judges also confirmed that
the administrative fine ordered by the Tribunal is
suitable for the prohibited conduct.
The Court confirmed that the “adjustments”
Message from Capitec's Debt Review Department: conducted by Shoprite in order to ensure that a
Consumer was granted credit, posed several
Capitec supports the objectives for which debt problems, in that:
counselling was established and its valuable Consumers were not informed of these financial
contribution to the debt rehabilitation of over- re-arrangements;
indebted consumers. Consumers were not asked whether they are
willing to sacrifice DSTV or short-term
Increasing the levels of consumers that cure insurances nor were they informed of the
through the debt counselling process is critical in omission;
the rehabilitation process and in nurturing over- Shoprite failed to obtain facts pertaining to the
indebted consumers back to financial health” spouses’ financial status, even though it
assumed the spouse will stand in for the
customer if they failed to pay.;
Shoprite did not ascertain whether a consumer
is willing to pay more on his bond in order to
afford credit offered by Shoprite;
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The Court further stated that even though
“adjustments” were made, there was still a shortfall
in affordability, nevertheless Shoprite proceeded to
grant credit.
Shoprite Investments Limited v National Credit Regulator
(A509/2107) [2019] ZAGPPHC 956 (18 December 2019)
Message from ABSA:
The Absa Debt Review Centre recently rebranded
itself to Absa Distressed Customer Solutions. This
reaffirms our commitment to assist customers who
are experiencing financial difficulties by providing
relief in a responsible manner. Five years ago, we
committed to DCASA members and debt counsellors
across the country to cooperate with debt counsellors
in assisting our consumers.
In 2020, we will continue this commitment by heavily
investing in our systems. We hope to have a market- this judgment. Numerous low-income Consumers,
leading debt review system by the last quarter of the if defaulted on the loan, faced a predicament when
year, which will integrate with many of the industry repaying the loan as a result of added legal costs,
service provider systems. the Consumers were obliged to re-pay much more
than “double the amount as at the time of default”
Absa will maintain our continuous engagements with as the Credit Providers argued that legal costs do
the DCASA executive and members, and will attend not form part of collection costs contemplated in
the various DCASA conferences during the course of Section 101(1)(b)-(g).
the year. The Judge states that the intention of the Legislator
should be considered and in order to do so they
STELLENBOSCH UNIVERSITY – COLLECTION need to look at the “ill” the Legislator sought to
COSTS JUDGMENT cure. It is evident that Credit Providers are not
A ground-breaking judgment was delivered in adhering to the hallmarks of equity, good faith
December 2019, clarifying what amounts should be reasonableness or equality. On the contrary, they
included in the calculation of Section 103(5) of the have allowed costs to run up with no apparent
NCA. abandonment.
Section 103(5) of the NCA replaced the common The Judge further states that if small loans are too
law “in duplum” rule. which states that a Credit costly to collect, then the Credit Providers should
Provider cannot claim more than double the ensure to extend credit responsibly to begin with.
amount, including amounts contemplated in This matter addresses the disparities of wealth in
Section 101(1)(b)-(g), once a Consumer has this country by exploiting the poor. It was ordered
defaulted on his/her credit agreement. that.....
The controversial question “what are defined as
amounts in Section 101(1)(b)-(g)”, specifically
pertaining to collection costs, has been clarified in & Review
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