South Africa’s National Credit Regulator (NCR) issued a circular on “debt review removal” services, warning that some providers are misleading consumers about the removal of debt review status from credit bureaus and charging prohibited upfront fees, in contravention of the National Credit Act (NCA). The NCR advised consumers to exercise caution and indicated that non-compliant providers risk enforcement action. The circular cites complaints that companies and individuals charge consumers upfront fees of up to ZAR 10,000 for promised debt review status removal that often does not occur, with consumers left without recourse where providers are unregistered with the NCR. It reiterates that while consumers may have a right to be removed from debt review, removal is not possible in certain circumstances as set out in NCR Withdrawal Guidelines 01 of 2021. Under section 126A(3) of the NCA, any person offering services to improve a consumer’s credit record or remove information from a credit bureau may not receive payment until the services have been fully performed and must provide a prescribed disclosure statement. The NCR directed providers to comply with section 126A(3) or abandon such services with immediate effect and requested that consumers report suspected violations to the regulator.
National Credit Regulator 2025-03-01
South Africa’s National Credit Regulator warns debt review removal firms to stop charging upfront fees or face enforcement action
South Africa’s National Credit Regulator (NCR) warned against misleading "debt review removal" services charging prohibited upfront fees, violating the National Credit Act. The NCR noted complaints of fees up to ZAR 10,000 for undelivered services and emphasized compliance with section 126A(3) of the Act, prohibiting payment before service completion. Non-compliant providers face enforcement action, and consumers are urged to report violations.