Durban- The National Credit Regulator has come out strongly to warn consumers to be wary of debt counselling being advertised as a “payment holiday or savings plan” where people are promised that they will save a certain portion of their monthly instalments.
The warning was given out on Wednesday by Kedilatile Legodi, Manager for Debt Counselling at the NCR.
She said this type of advertisement was misleading.
“Consumers need to understand that debt counselling is a relief measure to cope with the financial distress and that they remain responsible to continue paying their debts until they are paid up.
"Debt counselling does not in any way, give consumers a break from paying their debts," Legodi said.
She encouraged people to go out for help if they felt like they were over-indebted or in financial stress. Legodi said before going through debt counselling, peole should understand what the debt counselling process is and its ramifications.
“Debt counsellors have an obligation to explain the process in detail and to disclose applicable debt counselling fees in writing,” she said. The amounts, and time period are dependent on the consumer’s income, type of debt and their basic living expenses, Legodi said.
When all the debts had been paid up under debt counselling, a clearance certificate is normally issued to show that they are debt free she said.