Legislation regarding debt counselling in SA is vital for the protection of both consumers and creditors, and the standardisation of debt counselling and credit practices. Understanding the legislation surrounding debt counselling in SA is vital for consumers, so that they can understand both their rights and the rights of their creditors.
The National Credit Act No. 34 of 2005 was enacted in 2007 and lays out some important rules for both creditors and consumers, providing specific procedures for debt counselling in SA and review, aiming to protect the consumer.
The Act requires that all debt counsellors be registered with the NCR and pass the NCR debt review exam, meaning that debt counsellors will be well trained to deal with all manner of indebtedness, as well as having thorough knowledge of the debt review process as stipulated in the National Credit Act.
The National Credit specifies that after applying for debt review, a debt counsellor must provide all creditors with a proposal within 60 working days, and if they fail do so, the consumer is entitled to a refund of the application fees. This is to ensure that all paperwork is filed timeously and in accordance with the law and, once again, protect the consumer against unfair credit practices.
There are also stringent fee guidelines, and this ensures that a debt counsellor will never take advantage of anyone by overcharging for their services. The establishment of the Debt Counsellors Association of South Africa (DCASA) means that there is more than one body regulating debt counselling in SA. It has a code of conduct that protects both consumers and debt counsellors alike, and helps to educate debt counsellors.
The legislation in South Africa is taking a firm stance on the protection of consumer interests, and it is time that consumers start taking advantage of it.