Credit Ombud concerned about consumers after NCR withdrawal of Codes of Conduct

Calls to the Credit Ombud helpline suggest recent actions by the National Credit Regulator (NCR) to restructure the debt-counselling system have left some consumers and credit providers confused, says Manie van Schalkwyk, Credit Ombud.

“We would like to reassure consumers and the industry as a whole that we currently continue legitimately assisting consumers with complaints in all areas of our business, including debt-counselling matters,” notes van Schalkwyk.

The Credit Ombud has helped consumers resolve debt-counselling complaints since the beginning of 2011, after agreeing to the NCR’s request for assistance. The Credit Ombud’s extended mandate was approved by the Financial Services Ombud Schemes (FSOS) Council.

However, the NCR recently revised the Credit Industry Code of Conduct to combat over-indebtedness and the industry Code of Conduct for debt counsellors regarding debt review. One outcome would be moving debt-counselling complaints directly into the NCR from the Credit Ombud and the National Debt Mediation Association. It is not yet clear how this move might affect consumers.

“Consumers’ best interests are paramount so we want to engage constructively with the NCR to discuss recent developments, ironing out any issues and doing everything in our power to co-operate and find a way forward,” says van Schalkwyk.

The Credit Ombud’s jurisdiction covers complaints over disputes in three major areas ; Credit Information , Credit Agreements as well as Debt-Counselling disputes. In the past financial year, the Office dealt with a total of 5 506 disputes. Of these, 501 (or 9.1%) were debt-counselling disputes. The Credit Ombud made decisions in favour of consumers in 61% of the debt-counselling complaints.

The NCR’s communications potentially affect only debt-counselling complaints and not the other areas of operation, emphasises van Schalkwyk.

“This Office was founded in 2004 to assist consumers free of charge. We operate like the various other voluntary industry Ombud schemes that have been functioning well for many years in South Africa. Over the years, the Office of the Credit Ombud has helped hundreds of thousands of consumers with their disputes,” he notes.