You have a right to ask the caller where or how they obtained your information without your consent.

PERSONAL FINANCE

The National Credit Regulator (NCR) is issuing an alert to consumers to be vigilant of debt counsellors engaging in the deceptive or misleading practice of placing consumers under debt counselling without their knowledge or consent.

“Through an alarming number of complaints received by the NCR, a worrying trend has come to light,” says Enica Mpete, manager of the complaints department of the NCR.

Mpete says:

TRENDS OBSERVED

The following misleading trends leading to the consumers signing up for debt review without their knowledge or consent have been observed:

• Consumers are contacted telephonically and offered assistance on debt consolidation or reduction of interests or instalments on their accounts.

In other instances, the caller would claim to be calling from the NCR or working together with the NCR and the government to assist consumers with their debts.

• In most instances, callers already have consumers’ information in respect of their obligations, thus making consumers believe they are really working with the NCR and government.
• Consumers are misled to provide and/or confirm personal information telephonically with the understanding of providing same for something other than debt counselling (for example, debt consolidation or reduced interest or instalment on accounts).
• Debt counselling application forms are sent to consumers via a link to their phone to sign electronically, and all information obtained telephonically is later transferred to the form 16 or debt counselling application.
• Some consumers only become aware of the debt counselling flag when they apply for credit, which is rejected due to that flag.

WHAT YOU NEED TOKNOW AS A CONSUMER

• Debt counselling or debt review is a formal process that was introduced by the National Credit Act (NCA) as a voluntary debt relief measure to assist over-indebted consumers.
• A consumer is over-indebted if his/her income is not sufficient to cover all his/her living expenses and debt repayments.
• Consumers have a right to fully understand and consent to any financial decision and MUST NOT be pressured to sign any document without reading it and fully understanding its implications.
• Consumers should approach a debt counsellor for assistance and voluntarily apply for debt counselling – not the other way around.
• It is prohibited conduct and in contravention of the NCA for a debt counsellor to mislead consumers into debt counselling or place consumers under debt counselling without their knowledge and full understanding or consent.

WHAT YOU CAN DO AS A CONSUMER

You have a right to ask the caller where or how they obtained your information without your consent.

• Do not sign documents on your phone on the first day and/or during the first call.
• Always ask for a copy of the document so that you can read it at home before signing anything.
• Be cautious of unsolicited telephone calls offering assistance with your debt obligations and do not fall victim of these scams.
• Stay informed and educate yourself to understand your rights and options as a consumer in relation to debt review and its implications on your financial future.
• Report any related prohibited conduct to the NCR for further investigation.

If you suspect that you may be a victim, for more information or to report this prohibited conduct, contact the NCR complaints department on 0860 627 627 or complaints@ncr.org.za.

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