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National Consumer Tribunal cancels registration of debt counsellor Barry Kotze

25 November 2010 National Credit Regulator

In response to an application brought by the National Credit Regulator (NCR), the National Consumer Tribunal (NCT) cancelled the registration of a debt counsellor, Barry Kotze with immediate effect on 11 November 2010. The NCT considered Kotze’s failure to keep proper records and to comply with the procedures set out in National Credit Act (NCA) as extremely serious. The NCT found that he had placed his clients at risk by repeatedly failing to comply with the administrative duties of debt counsellors as prescribed by the Act and its regulations and also failed to comply with certain conditions of his registration. All of Kotze’s client files were ordered to be handed over to the NCR and distributed to other debt counselors in order to assist the affected consumers.

National Credit Regulator’s CEO, Gabriel Davel said the regulator would continue to use the National Credit Act to protect consumers from debt counsellors who did not fulfil their duties.

“Kotze’s behaviour placed his clients at serious risk because credit providers could institute legal proceedings against them for not repaying their debts,” says Davel. “The negligence of a debt counsellor could result in clients losing their property including their homes and cars.”

The NCR established that Kotze:

· Failed to comply with the prescribed time-frames for processing debt review cases and referring matters to a Magistrate’s Court;

· Did not maintain adequate accounting records;

· Did not make use of one of the NCR’s approved Payment Distribution Agents for the distribution of consumer funds to their respective creditors; and

· Collected moneys from consumers in contravention with his conditions of registration.

Manager of Investigations and Enforcement at the National Credit Regulator Adv. Jan Augustyn says the Tribunal ordered that Kotze conduct a full audit on all files and accounts used for debt counselling.

“The effect of non compliance with the NCT Order is a criminal offence and punishable with a fine and/or imprisonment for a period up to 10 years,” he added.

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