NCR agrees to proposed charge guidelines

28 November 2012

Johannesburg – The National Credit Regulator (NCR) has agreed to guidelines proposed by the Debt Counsellors’ Association of South Africa to prevent the exploitation of people who want their debt restructured, the NCR said on Friday.

The guidelines set maximum fees that debt counsellors may charge and are an interim measure pending the finalisation of the fee regulations by the department of trade and industry.

Peter Setou, the NCR’s senior manager for education and strategy, said the guidelines were developed because the counsellors were only allowed to charge R50, in terms of the national credit act (NCA), for their services and had no guide for fees for other services.

There have been complaints about counsellors charging exorbitant fees to help indebted people restructure their financial commitments.

Legal opinion sought

The guidelines were developed in terms of legal opinion that stated any other fees were not regulated and cover consumers earning more than R2 500 (individual gross income, while consumers earning below R2 500 will be subsidised by the NCR.

Debt counsellors are encouraged to use these as a guideline and charge less where appropriate, said Setou. Fees must also be disclosed upfront to consumers.

In terms of the guidelines, a debt counsellor may receive the following amounts in respect of consumers with an individual gross income of more than R2 500 per month or household income of more than R3 500 per month: an application fee, recoverable directly from the consumer upon receiving an application for debt review, limited to R50; a rejection fee of R300; a restructuring fee of the lesser of the first instalment of the debt re-arrangement plan, or R3 000 (excluding vat).

For joint applications – a husband and wife – this could be increased to R4 000.


If the debt counsellor fails to submit proposals to credit providers or refer the matter to a tribunal or a magistrate’s court within 60 business days from date of the debt review application, the debt counsellor has to refund 100% of the fee paid by the consumer.

They may also charge a monthly after-care fee of 5% (excluding vat) of the monthly instalment of the debt re-arrangement plan up to a maximum of R300 (excluding vat), for a period of 24 months.

After that it may be reduced to 3% (excluding vat) of the monthly instalment, to a maximum of R300 (excluding vat), for the remaining period of the debt re-arrangement plan.

Should the consumer wish to withdraw from the process after the debt counsellor has completed the restructuring negotiations, a fee equal to 75% of the restructuring fee is payable by the consumer.

Legal fees may be recovered from the consumer provided the amount of such fees is disclosed up-front to the consumer and agreed to in writing by the consumer.

The fee structure will be reviewed in January 2009.

There are about 300 debt counsellors currently working in South Africa.

– Sapa

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