The National Consumer Tribunal (NCT) has declared a debt counsellor’s conduct prohibited, ordered a refund of R14,089, and imposed an administrative fine of R90,000 after finding that a consumer was placed under debt review without her knowledge or consent.
The judgment in Monyela v Witbooi t/a Debt Solutions Co is significant for the debt counselling industry.
It addresses the limits of delegation in debt counselling practices, the consequences of proceeding with debt review applications after mandate is revoked, and the NCT’s willingness to impose administrative fines of its own accord.
The Facts of the Case
On 5 December 2024, the consumer — a government employee earning a net monthly salary of approximately R60,929 — was cold-called by someone identifying herself as being from the “National Credit Bureau.” The consumer was told the company assisted government employees by negotiating lower interest rates on vehicle finance. Her monthly vehicle instalment of R19,162 would be reduced to R14,089.
Documents were sent to the consumer by email. She signed and returned them.
The consumer was never told she was applying for debt review. The documents were in fact a Form 16 — a formal application for debt review under section 86(1) of the National Credit Act 34 of 2005 (NCA).
At the time, the consumer was critically ill with cancer and, by her own account, under heavy sedation. She signed without understanding the nature of the documents.
The consumer later received a notification from ABSA Bank that her debit orders had been cancelled and that she had been placed under debt review. This was the first time she became aware of what had occurred.
Guardians of Fairness
The Consumer’s Financial Position
The consumer’s only debt was a vehicle finance agreement with ABSA, at R19,162 per month. After meeting this obligation, she had approximately R41,767 remaining — roughly 65% of her net income. She was not over-indebted by any reasonable measure.
The Form 16 submitted by the debt counsellor contained fabricated expenditure entries: R6,000 for child maintenance (the consumer has no children) and R3,000 for travel expenses (the consumer was bedridden at the time). The debt counsellor could not explain these inaccuracies.
Cancellation Ignored
On 16 December 2024, the consumer contacted Debt Solutions Co, verbally revoked the mandate, and sent a written cancellation email. Despite receiving this cancellation, the debt counsellor issued a Form 17.2 to ABSA on 20 December 2024, declaring the consumer’s debt review “successful.”
At the hearing, the debt counsellor admitted receiving the cancellation but attributed the continued processing to an “administrative error.”
The Tribunal’s Findings
The NCT, presided over by Dr MC Peenze and sitting with Mr CJ Ntsoane and Ms P Manzi-Ntshingila, made the following findings:
Failure to explain the consequences of debt review (Condition A3)
The debt counsellor never personally engaged with the consumer at any stage. All contact was through an administrative agent. The Tribunal confirmed that the administrator lacked the legislative authority to explain the debt review process and its consequences. Merely obtaining a signed Form 16 did not discharge the debt counsellor’s statutory duty under general condition A3.
The Tribunal found this constituted a contravention of section 52(5)(c) read with condition A3.
Invalid mandate — consumer de iure never applied for debt review
Given the consumer’s cognitive impairment due to cancer treatment and sedation, the Tribunal held that any mandate given was invalid. The consumer was not aware she was applying for debt review and did not understand the nature of the documents she signed. Consequently, the entire debt review process was unauthorised.
Consumer was not over-indebted
On the financial evidence, the consumer was plainly not over-indebted. The Tribunal found the debt counsellor contravened section 86(6) (failure to conduct a proper assessment) and section 86(7)(b) (which requires rejection of a debt review application where the consumer is not over-indebted).
Unprofessional conduct
Proceeding with the Form 17.2 after receiving the written cancellation was found to be unprofessional, unfair, and in breach of conditions A2 and A5. The “administrative error” defence was rejected. The Tribunal declared this conduct brought the debt counselling industry into disrepute.
remove debt review
The Order
The Tribunal made the following orders:
The debt counsellor’s conduct was declared prohibited under section 150(a) of the NCA.
A refund of R14,089.00 was ordered within seven days.
An administrative fine of R90,000.00 was imposed, payable within sixty business days into the National Revenue Fund. The fine was imposed by the Tribunal of its own accord under section 150(c) — the consumer had not requested it.
The NCR was ordered to correct the consumer’s credit record within ten days and communicate the corrected profile to the consumer and all credit providers.
The Tribunal drew attention to section 164(3)(b), noting that the consumer may approach a civil court for assessment of damages arising from the prohibited conduct, supported by a Tribunal certificate.
Why This Judgment Matters
For debt counsellors
The duty under general condition A3 — to fully inform consumers of the consequences of applying for debt review — rests with the registered debt counsellor personally. Delegation to administrators, call-centre agents, or other staff is not sufficient. Firms operating models where the registered counsellor has no direct contact with consumers during the application stage face significant compliance exposure.
Cancellation requests must be actioned immediately and the debt review process halted. Reliance on “administrative error” as a defence for continuing processing after revocation of mandate will not be accepted by the Tribunal.
Form 16 applications must contain accurate financial information. Unexplained inaccuracies — particularly fabricated expenditure entries — will seriously undermine a debt counsellor’s credibility before the NCT.
For the NCR
The Tribunal’s pointed remarks in paragraph 32 of the judgment are notable. The NCT reminded the NCR that its investigative duties include examining the consumer’s mental state at the time of signing a Form 16 where the application’s validity is contested. The NCR had issued a non-referral notice in this case, requiring the consumer to bring the matter to the NCT herself under section 141(1)(b).
While this commentary is obiter, it signals the Tribunal’s view that the NCR should investigate complaints about unauthorised debt review applications more rigorously before declining to refer them.
For credit providers
The order requiring the NCR to correct the consumer’s credit record within ten days underscores the Tribunal’s authority to direct credit bureau corrections. Credit providers who receive notification of such corrections must update their records accordingly.
For consumers
The judgment confirms that consumers who believe they were placed under debt review without consent have a direct remedy at the NCT under section 141(1)(b), even where the NCR declines to refer the complaint. Consumers may also pursue civil damages under section 164(3)(b), supported by a Tribunal certificate of prohibited conduct.
I am totally satisfied with the service of VHT Attorneys. Thank you. I appreciate your help with my case and the speedy response.
A Note on the Administrative Fine
The Tribunal imposed the R90,000 fine of its own accord. Section 150(c) permits this, and section 151(2) caps fines at the greater of 10% of the respondent’s annual turnover or R1,000,000. Where turnover evidence is not before the Tribunal, the R1,000,000 cap applies.
The Tribunal’s reasoning under section 151(3) emphasised: the serious nature of the contraventions; the complete disregard for the NCA and consumer rights; the adverse credit bureau listing suffered by the consumer; and the need to send “a clear and strong message” to the debt counselling industry.
Practitioners should note that a fine can follow a section 141(1)(b) application — it is not confined to enforcement proceedings initiated by the NCR.
VHT Attorneys’ Perspective
At VHT Attorneys, we act in proceedings before the National Consumer Tribunal for consumers, debt counsellors, credit providers, and other regulated entities. We see the practical implications of judgments like Monyela v Witbooi in the compliance environments we advise on daily.
This judgment is a straightforward case on its facts, but the principles it reinforces are far-reaching. Debt counselling firms that rely on delegated, call-centre-style consumer engagement — without ensuring the registered debt counsellor personally discharges the duties imposed by the NCA and the conditions of registration — are operating at material compliance risk.
If you require assistance with NCT proceedings, NCA compliance, or regulatory risk management, contact VHT Attorneys.
FAQ
Can the NCT impose a fine even if the consumer does not ask for one?
Yes. Section 150(c) of the NCA empowers the Tribunal to impose an administrative fine of its own accord. In Monyela v Witbooi, the consumer did not request a fine, but the Tribunal determined that the severity of the conduct warranted punitive sanction. The fine is capped at the greater of 10% of the respondent’s annual turnover or R1,000,000 (section 151(2)).
Can a consumer approach the NCT directly if the NCR declines to refer a complaint?
Yes. Section 141(1)(b) allows a consumer, with the Tribunal’s leave, to bring an application directly against a respondent for alleged NCA contraventions. In this case, the NCR issued a non-referral notice, and the consumer successfully proceeded to the Tribunal on her own initiative.
Can a debt counsellor delegate the duty to explain debt review consequences to an administrator?
Based on the finding in Monyela v Witbooi, no — the duty under general condition A3 was not discharged by the administrator’s interaction with the consumer. The Tribunal held that the debt counsellor must personally ensure the consumer is fully informed. Practitioners should note this finding is in the context of condition A3 specifically.
What happens if a Form 16 contains inaccurate financial information?
The Tribunal will scrutinise the accuracy of Form 16 data. In this case, fabricated expenditure entries (child maintenance for a consumer with no children, travel expenses for a bedridden consumer) undermined the debt counsellor’s credibility and supported the finding that a proper assessment under section 86(6) was not conducted.
Can a consumer claim damages for being wrongly placed under debt review?
The Tribunal pointed the consumer to section 164(3)(b) of the NCA, which allows a person to commence a civil court action for assessment of damages arising from prohibited conduct. The Tribunal can issue a certificate confirming the conduct is prohibited, which serves as proof in the civil court proceedings.
Cornel van Heerden
Director
WHO ARE WE AT VHT
VHT Attorneys is a boutique law firm with a large vision. We provide innovative legal solutions with a renowned standard of integrity and confidentiality.
We help our clients:
- Remove Debt Review Status
- Commercial & Corporate Law
- Labour Law
- Dispute Resolution / Litigation