Debt control management does consist of laws for consumers and debt counsellors to follow in which these laws assist in making the debt management control process smooth and fair for both parties. The laws of debt control management relate to The National Credit Act which started before debt control management.
Debt control management came about after The National Credit Act Nr 34 of 2005 came into effect in 2007. This act established the National Credit Regulator or NCR, and created the vocation of debt counsellor.
The act makes provision for consumers who are struggling to make payment and as a result are falling behind on their debts and aims to stamp out unfair credit practices in South Africa. The act in accordance with the NCR acts as the guardians of the debt control management industry, and sets out the regulations and protocol for debt control management.
One of the most important parts of the act is the free structure that it sets out for debt control management, as counsellors may not exceed these fees. Therefore consumers should familiarise themselves with this recommended fee structure before applying for debt control management and they should also be aware that they are entitled to negotiate these fees.
In accordance with the act all persons involved in debt control management, such as debt counsellors should be registered with the NCR and have all the necessary accreditation available upon request. This regulates the debt control management industry and ensures fair and safe practices when it comes to a consumers finances.
The act also stipulates new consumer rights when it comes to debt such as the right to be informed before negative information is given to a credit bureaux, as well as the right to be given reasons when credit is denied.
Since its inception, The National Credit Act has been working hard to change the credit landscape in South Africa and make it safer for consumers.