NCR does it for the consumer

According to Gabriel Davel, CEO of the NCR, the high-resolution rate was a highlight of the year, proving the efficacy of the newly developed and implemented policies and procedures, IT systems and capacity building efforts.

Another highlight of the year was the success of the NCR in dealing with the highly publicised case against credit provider Rudco Finance (Pty) Ltd. The Rudco affair, affecting an estimated 3 000 consumers, was resolved within six months.

In addition, during the year under review, the NCR established a fund to pay for the cost of debt counselling for low-income consumers. This covers consumers earning less than R3 500 per month. The NCR appointed a firm of registered accountants and auditors to manage payment of the subsidised fees to debt counsellors.

Nomsa Motshegare, Chief Operating Officer, says by introducing debt counselling, the National Credit Act made it possible for over-indebted consumers to find relief for their woes.

“For the first time, a South African consumer who is overextended and faces legal action from those he or she owes money to, can approach a debt counsellor for assistance,” adds Motshegare.

In a bid to achieve some uniformity for debt counsellors and what they may charge consumers, the NCR facilitated and approved fee guidelines that were agreed to by the debt counsellors' industry body. This intervention will, while the fee regulations are being finalised, ensure minimum exploitation of consumers by debt counsellors.

According to Motshegare, one of the most significant milestones for the NCR was to establish co-operation between debt counsellors and credit providers. The Regulator was instrumental in getting the parties to collectively resolve many issues and thus ensure better and more effective implementation of the Act, as well as creating a better environment for the benefit of consumers.

During the year under review, almost all players in the industry - especially major credit providers: major banking groups, micro lenders and retailers - were registered by the end of March 2008. A total of 2 534 credit providers with 27 137 branches, 11 credit bureaux and 336 debt counsellors have been fully registered.

“We are encouraged by the level of engagement with industry as well as support of a vision to have all role players positively contribute to a better economy and industry,” says Davel.

On concerns that the National Credit Act is one of the contributing factors to the slowdown in the property market and the motor industry, Davel points out that the Act does not prevent consumers from accessing credit but requires credit providers to conduct an affordability assessment on credit applications on the credit and to practice responsible credit granting.

“Factors such as rising interest rates, high food prices, rising oil and petrol prices make it more difficult for consumers to service their debts,” Davel explains.

Looking ahead, Davel says, “The NCR is more than committed to ensure compliance with the Act, more engagement with industry, consumer education and protection.”