NCR: Media Release

MSR Financial Solutions (Pty) Ltd and other credit providers flout the National Credit Act and deals with the consequences

The National Credit Regulator welcomes the judgement that was handed down by the National Consumer Tribunal (Tribunal) against MSR Financial Solutions (Pty) Ltd previously known as Major Authorised Debt Mediation (Pty) Ltd which entity is conducting its business in Bloemfontein, Free State region. This judgement follows an investigation by the National Credit Regulator into the conduct of the aforementioned entity. The investigation revealed that the entity was acting in a manner contrary to the provisions of the National Credit Act. “The National Credit Regulator subsequently referred an application to the Tribunal”, says Ms. Nomsa Motshegare, CEO of the National Credit Regulator.

The National Credit Regulator’s investigation revealed that MSR Financial Solutions (Pty) Ltd previously known as Major Authorised Debt Mediation (Pty) Ltd informed to provide alternative dispute resolution services whilst it was not registered as an Alternative Dispute Resolution Agent with the National Credit Regulator. Motshegare explains that in terms of the National Credit Act, an entity providing the services of an Alternative Dispute Resolution Agent must register with the National Credit Regulator.

“MSR Financial Solutions (Pty) Ltd previously known as Major Authorised Debt Mediation (Pty) Ltd also displayed the National Credit Regulator’s logo on its advertisements which gave the impression that the National Credit Regulator condoned its business practices which was never the case”, says Motshegare. “The services offered went beyond the scope of an Alternative Dispute Resolution Agents’ services and was akin to the services provided by a debt counsellor and a payment distribution agency”, adds Motshegare. Consumers were effectively paying fees for an unlawful service and/or a service which they did not even receive. “The aforesaid conduct was found to be a serious prohibition and a contravention of Section 134A read with Section 1 and Regulation 10B of the Act” adds Motshegare.

Furthermore to this, the entity was found to have contravened Section 44(2), 3(g) and Section 126A and 126(3) of the National Credit Act. The Tribunal imposed an administrative fine against the entity in the amount of R50 000.00 and amongst other orders ordered the entity to refund fees and costs to consumers.

Motshegare alerts consumers of the aforesaid conduct observed within the credit market. It is imperative that consumers ensure that the entities they approach for Alternative Dispute Resolution services are in fact registered with the National Credit Regulator to provide such services. She also stressed that only a registered debt counsellor can make a determination of over-indebtedness. This clearly means that consumers should check if a person declaring them to be over-indebted is indeed registered with the National Credit Regulator by checking on the website www.ncr.org.za or alternatively to call 0860 627 627.