Two years ago, the NCR became concerned about the increasing criminal behaviour of some debt counsellors and unaccredited paying agencies, which resulted in consumers' monies being stolen or not being paid over to creditors. To curb the theft and maladministration, it issued a tender and accredited five PDAs.
"In accrediting these PDAs, audits were undertaken to ensure that such entities have the requisite infrastructure to perform the function of payment distribution," says NCR senior manager: education & strategy, Peter Setou. "The organisation also ensures that such entities have adequate insurance cover to compensate consumers in cases of loss. If debt counsellors were allowed to carry out payment distribution, the organisation would not be able to monitor and control the system as it is able to do now."
Debt Monitoring SA, which had been collecting money from over indebted customers, despite not being an accredited PDA, made the application to stop the NCR preventing debt counsellors from engaging or rendering payment distribution services to credit providers on behalf of their clients. It argued that the NCR should not impose as a condition of registration that debt counsellors only be allowed to use accredited PDAs.
"This judgment has strengthened the organisation's resolve to ensure that consumers' and credit providers' interests are protected in the debt counselling process," concludes Setou.
The NCR will continue to enforce the Act and specifically ensure that debt counsellors only use accredited PDAs. Consumers are also urged to check whether their debt counsellors are using accredited PDAs. If in doubt they should contact the NCR.
