Thank you for the question
All debt counsellors are required to register with the National Credit Regulator (NCR) and are also regulated by the NCR.
All aspect of debt counselling and debt review, including the fee structures are regulated by the NCR.
The NCR has approved a structure where debt counsellors are allowed to take an amount equal to the first month’s instalment to a max of R6000 plus VAT. Thus, if your monthly instalment on your debt is R2500 the debt counsellor is only allowed to charge R2500. Debt counsellors are not allowed to charge an amount exceeding the instalment amount. This initial fee is taken in the first month and is worked into the instalment. All credit providers are aware of this and know exactly how the fee structures work i.t.o the ACT.
The debt counsellor also earns an aftercare fee of 5% of the monthly instalment, but also capped at R450 plus VAT. A debt counsellor is not allowed to charge more than that. The aftercare fee is to enable the debt counsellors to give you as a consumer a continuous service until your debt review is completed.
Another fee that is present in most debt counselling cases is a legal fee. This is paid to the attorney who will present your case to the court. This fee might vary, as it is not regulated by the National Credit Regulator and depends on which attorney your debt counsellor uses.
Hope your questions were answered sufficiently.