The National Debt Counselling Association (NDCA) has submitted a key proposal to government, aimed at enhancing standards in the sector and preventing unregistered or unethical practitioners from posing as legitimate debt counsellors.
The proposal recommends that fit-and-proper requirements be introduced for debt counsellors. These will be based on the existing regulations in the National Credit Act, but enhanced by the provisions of the Conduct of Financial Institutions (COFI) Bill, and the Treating Customers Fairly (TCF) principles.
The proposal details the fit-and-proper requirements, which include:
- Increased competence requirements, including higher levels of minimum recognised qualifications, more direct relevant experience, and an apprenticeship in the role before becoming fully qualified. These would supplement the existing requirements, including completion of a regulatory examination, continuous professional development, and continued monitoring of good standing, such as SARS and criminal clearance, as part of licence renewal.
- Honesty, integrity, and good-standing provisions requiring practitioners not to have criminal convictions related to fraud, dishonesty, or financial misconduct. A background check will include criminal record and financial history verification. Practitioners will have to complete an annual fit-and-proper assessment.
- Operational ability, with the resources, processes, and systems to conduct business effectively and fairly. Practitioners will also need to comply with governance and risk-management standards, and must regularly review these. They will have to demonstrate financial stability and comply with financial reporting requirements.
- Oversight requirements will clarify roles for key individuals (registered debt counsellor) and representatives (debt counsellor in training), similar to the way key individuals operate in insurance. Debt Counsellors in training will work under the supervision of a registered debt counsellor for a period of time before they may register themselves.
The NDCA believes that applying the COFI bill to the debt counselling industry will ensure uniformed standards of conduct across all financial institutions. It will improve consumer protection by addressing misconduct, conflicts of interest, and unfair practices, and enhance transparency and accountability.
Debt counsellors will also be required to incorporate into their business models the TCF principles, consisting of six fairness outcomes: a customer-centric culture; products and services that meet consumers’ needs; clear, transparent communication; suitable, unbiased advice that is in the interests of consumers; products and services that meet expected standards; and fair, efficient complaint handling.
René Moonsamy, the newly elected chairperson of the NDCA, says debt counsellors hold positions of trust, guiding financially vulnerable people towards sustainable debt management.
“Arguably, the debt counselling licence is the single most important financial services licence granted in South Africa. This proposal aims to align the debt counselling sector with the rest of the financial services industry.”
The proposal was submitted to the Department of Trade, Industry and Competition, the National Credit Regulator and other debt counselling industry players during a series of engagements in October 2025. The NDCA hopes that some of the recommendations will find their way into the amendments to the National Credit Act and its regulations.