Amended Credit Bill will assist consumers

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According to Wikus Olivier, a debt counsellor at DebtSafe, the new amendments are very consumer orientated and has put the consumer at a very favourable position to address their debt problems.

There are a few changes to sections within the act pertaining to debt counselling. Some of the amendments include:

• Section 129. In the past, if a section 129 notice has been issued, the consumer could not include that account in debt review. However, now a consumer can apply within ten days of the section 129 notice and have that debt included.
  
• When a consumer is under debt review, the credit providers cannot terminate that debt review if a court date has been obtained. In the past, credit providers could find technical ways to terminate the debt review, even if it was on a court roll.
  
• Affordability assessments done by credit providers when a consumer applies for credit will be regulated. The assessments will be a lot stricter than what we are used to, and will result in fewer people being able to get credit. This will also lead the way in identifying reckless credit granting more easily.
  
• When a consumer is under debt review and all the smaller unsecured debt has been repaid, a clearance certificate can be issued if the larger debts such as a home loan are up to date. In the past, a clearance certificate could only be issued when all debt was paid in full. This caused several issues due to larger debts, like home loans, not being paid and therefore causing some technical challenges when trying to rehabilitate consumers into the credit market.
  
• Prescribed debt cannot be collected or sold to any third party.
  
• The continued removal of negative and adverse consumer credit information will hold great benefit for consumers. If a debt has been repaid, all negative information on that debt has to be removed. This information will be specific negative listings like Judgements, Slow Payer, Absconded, Default Listings, etc. Listings op debt with outstanding balances will remain on the credit profile. The payment history will remain untouched, even if the debt has been settled and negative information removed.

Importance of registration

"These amendments will allow for alternative dispute resolution agents (ADR) to be registered who handles disputes between consumers and credit providers on a voluntary basis. We foresee that most debt counsellors will register as ADR in order to have a broader service offering. An ADR that is not a registered debt counsellor are prohibited from doing debt review activities," explains Olivier.

"Payment distribution agencies (PDA) will also be able to register in terms of the Act. In the past only three PDAs were accredited by the National Credit Regulator (NCR) and were the only ones to offer the payment and distribution services up to date. Consumers need to make sure that the PDA they are using through their debt counsellor is in fact registered with the NCR.

"All credit providers have to be registered with the NCR. In the past there were certain thresholds that a credit provider had to exceed in order to register. Now, every person or company that gives out loans or credit has to be registered with the NCR. This will help the NCR in combating reckless and unscrupulous lenders which will in turn help protect the consumer," concludes Olivier.