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The NCR and the Credit Ombud rowing together in the same boat

The NCR and the Credit Ombud rowing together in the same boat

The National Credit Regulator (NCR) and the Credit Ombud have signed a Memorandum of Understanding (MoU) facilitating co-operation and collaboration in achieving the objectives of the National Credit Act 34 of 2005 (the Act) and specifically the resolution and investigation of disputes between non-bank credit providers, credit bureaux and consumers.

The NCR is responsible for regulating credit providers and is tasked with carrying out education, research, proposing policies to the Minister, registration of industry participants, investigation of disputes and ensuring the enforcement of the NCA 34 of 2005. The Credit Ombud is a voluntary, non-statutory body; afforded recognition under Section 11 of the Financial Services Ombud Scheme Act, 2004 and is an Ombud with jurisdiction in terms of the NCA; which engages in the resolution of disputes arising within the non-bank credit industry and consumers.

Section 139 of the NCA provides that the NCR may, upon acceptance of a dispute, refer such dispute to an Ombud with jurisdiction for the purpose of assisting the credit provider and consumer to resolve the dispute. The NCR agreed that all disputes against members of the Credit Ombud will be referred to the Credit Ombud for resolution. The Credit Ombud resolves disputes between consumers and credit providers relating to credit agreements and credit information, this covers all disputes of clothing and furniture retail accounts, micro lenders, and other non-bank loans.

The MoU will see the NCR and Credit Ombud work together on several areas of co-operation. The main elements include the following:

  • As an alternative to disputes being investigated by the NCR against subscribing members of the Credit Ombud, the NCR shall refer non-bank credit agreement and credit information matters to the Credit Ombud;
  • Quarterly reporting to the NCR by the Credit Ombud regarding the resolution of disputes referred by the NCR;
  • Capacity building and training programmes;
  • Outreach initiatives and credit industry awareness and education;
  • Research and information sharing.

The services offered by the Credit Ombud is FREE to consumers wanting to resolve their disputes arising from within the non-bank credit industry. Consumers are not bound by the ruling or decision of the Credit Ombud and may refer a matter to the NCR.

Working together is pivotal to building and maintaining the spirit and objective of the NCA.