One aspect of the NCR circular which makes some in the industry nervous is the statement that consumers must be the one ‘approaching’ a Debt Counsellor for assistance. This is sort of stated twice in the document.
While this does make sense and seems to be aimed at some of the fraudulent or misleading practices mentioned above, it might also be read that Debt Counsellors can never be the one to initiate any contact with consumers about debt review.
Taken to extremes this could mean, no roadshows, no workshops, no financial advice sessions for companies, no handing out fliers, no conversations with friends in financial trouble, perhaps even no adverts on social media or the internet inviting consumers to make contact.
Since the circular implies the consumer would have to be the one ‘approaching’ the Debt Counsellor, a Debt Counsellor may technically then never be the one initiating a call or visit… even if asked to do so by the consumer or a court. Many Debt Counsellors, for example, offer to call consumers who do not have airtime. They offer such on their websites. The idea being to help the consumer without big costs to them.
While it is a small concern and does not seem to be the intent (it seems aimed at people making calls in bulk perhaps) this may require further clarification.
Where is the line and how do Debt Counsellors avoid crossing it?
And the basis for such needs some clarification as well.
Also, the circular says that a Debt Counsellor needs to do a proper assessment of the consumers financial position (a review of their income and debt) before placing a consumer under debt review.
While this does seem to be aimed at getting Debt Counsellors to do a thorough job right from the start, it calls for a Debt Counsellor to essentially do a debt review before placing the consumer in debt review.
So, this is a bit of a concern.
How much of a review is needed exactly?
(Note: At present, the current wording of the NCA does not make provision for a Debt Counsellor to refuse to process a Form 16 formal debt review application if signed and all information is provided).