Regulatory Alerts2021-03-05
Added · Updated
Circular 2 of 2021 - Circular on ADR agents
Entities operating as Alternative Dispute Resolution Agents for consumer credit complaints must be registered with the National Credit Regulator, as only registered agents are authorized to facilitate such resolutions. Credit providers are prohibited from interacting with or providing information to unregistered ADRs and must verify registration status before engagement. The National Credit Regulator will enforce appropriate actions against any entities operating as ADRs without proper registration.
CIRCULAR ON ADR AGENTS FURTHER INFORMATION Any queries should be addressed to Adv. Theodore Smith at TSmith@ncr.org.za
- In 2016, the National Credit Regulator (“NCR”) issued Circular no. 14 of 2016 setting out the legislative requirements in terms of section 134A read with Regulation 10B of the National Credit Act 34 of 2005 (“the Act”). The said provisions require entities who are operating as Alternative Dispute Resolution Agents (”ADRs”) for the resolution of consumer complaints on credit agreements to be registered with the NCR, provided that the complaints do not involve credit providers who are nancial institutions as de ned in the Financial Services Ombud Schemes Act 37 of 2004.
- It has come to the NCR’s attention that there are still entities operating as ADRs for the resolution of consumer complaints on credit agreements without being registered with the NCR. It must be noted that it is only NCR registered ADRs who are authorised to facilitate the resolution of consumer complaints in respect of credit agreements.
- The Act promotes that credit providers participate in good faith with registered ADRs for the resolution of complaints on credit agreements. Participation in good faith by credit providers provides for not only alternative means to resolve complaints of this nature, but also ensuring expeditious resolution of complaints.
- The NCR re-emphasises that Credit providers are requested not to provide consumer documents and information to, or interact with any unregistered ADRs. Credit providers who are in doubt about the registration status of any entity or person can contact the NCR for veri cation.
- Please be advised that the NCR will take appropriate enforcement action against entities that operate as ADRs without being registered. Disclaimer: While the NCR has taken reasonable care to ensure the factual accuracy of this circular, it cannot guarantee such accuracy especiallywith regardsto future events. Accordingly, NCR does not accept any liability for damagesincurred by any party as a result of decisions or actions taken on the basis of information supplied in this Circular. CIRCULAR 02 OF 2021 Number 02 | February 2021