Unscrupulous Debt Counsellors seal their fate

28 November 2012

The South African Banking Risk Information Centre was proved correct last week as the public was warned to be careful of false promises from Debt Counsellors who may be abusing their profession and the debt review process.

Luke Hirst, MD of Debt experts DebtBusters, says ‘The National Consumer Tribunal (NCT) decision to cancel the registration of two non-compliant debt counsellors on Tuesday is an encouraging indicator for the Debt Counselling industry.’

‘We at DebtBusters welcome the NCR’s action on non-compliant debt counsellors as other debt counsellors, who are providing a good and much needed service to over-indebted clients, are tarnished by this association. ‘

According to the NCR, a Debt Counsellor is someone who is registered with the National Credit Regulator and who assists consumers who are experiencing debt-related problems and are having difficulty making their current monthly payment by providing them with budget advice, support and mediation with credit providers. Rules and regulations need to be adhered to.

Hirst continues, ‘There is still a long way to go until the industry is well regulated and many more cancellations of registered debt counsellors need to be made. There are many unethical practices going on out there such as overcharging of fees , claiming clients funds, failure to send ‘changes of circumstances’ to credit providers and failure to do annual budget renewals, among many more.’

‘Such practises should not be tolerated and we are very pleased to see the regulator taking the appropriate action. It is imperative that consumers seek the assistance of a reputable Debt management company who have the infrastructure and support to service their clients, whilst at the same offering the client the best solution for their circumstances.’.

Unfortunately if consumers contact the NCR they will be given the number of a randomly selected Debt Counsellor, regardless of what service they provide.

Hirst goes onto say that ‘If consumers are in doubt as to which debt counsellor to use I would suggest they ask their bank or research on-line’.

When consumers speak to the debt counsellors they must ask questions as to the infrastructure and service that the counsellor will provide and for what fees.

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