In September 2018, The National Credit Regulator (NCR) issued a notice of their intention to withdraw the reckless lending fee of R1,500.00. This on the back of conducting an investigation on how any investigations were actually done whilst debt counsellors charged the fee. Needless to say, the investigation showed that most debt counsellors charged a fee of R1,500.00 and merely requested the affordability information as a matter of procedure. It seemed that no investigation was actually done.

In October 2018, the NCR issued a further notice to request for written comments of their intention to withdraw the reckless credit fee of R1,500.00. The submission date was extended but no final notice has been issued in this regard.

The NCR engaged with Consumer Friend to determine if the notice the NCR issued affected the number of requests. Whilst we did see a marginal decrease, this was most likely attributed to the approaching year end, and not as a result of the notice issued by the NCR. The reckless credit slide in this report pack is evidence of this.

Debt counsellors are clearly against the removal of the fee, as they already feel that the current fee they may charge the consumer for applying for debt review is too low for them to make a living. By removing the reckless credit investigation fee, it is going to increase financial pressure on them whilst they still have to conduct the investigation. We, however, from past statistics on the number of investigations conducted, feel that it will curb the number of investigations as debt counsellors will likely apply their mind and be more prudent on which matters they wish to investigate.

The Debt Counselling Association of South Africa (DCASA) are in discussions to make a compromise by smoothing the fee over the debt review process.