29 Jan Avoid Debt Review Scams: Steps to Take in 2025
Most of us have fallen victim to a scam before. People with too much debt are especially vulnerable, especially to debt review scams. Fraudsters spot that the overindebted are desperate for help and convince them to pay exorbitant fees under the guise of being a debt counsellor. They might ask for monthly payments, assessment fees, and payment distribution agency fees, then cackle all the way to the bank.
To avoid debt review scams this year, it’s crucial you know what to look out for: higher-than-prescribed fees, illegitimate contact details, false PDA and NCR numbers, that scammers are unassociated with authoritative bodies, and that they don’t have professional premises. We’ll reference the National Debt Counsellor Association’s and IOL’s checklist and add a few extra tips.
This post discusses strategies for avoiding debt review scams in 2025: what to look out for, why, and how Debtco Group could be the answer to your over-indebtedness.
Debt Review Scams to Watch Out For
Often, you can spot whether a debt counselling effort is a scam by whether its website follows modern web design conventions, whether its blog is accurate, whether its NCA and PDA numbers are registered on the NCR’s website, whether its fees are prescription-aligned, whether it belongs to a professional association, and whether its premises are well looked after.
Industry-Standard Website
Debt counsellors should have a website that follows modern conventions – a simple and clean design, visible contact details, a latest news or blog page, and pages describing their process and fees.
An outdated website signals that a firm may not have the budget to maintain a reputable digital front and does not have the resources to operate well. Ensure their information is accurate and correct, providing hints and tips about the debt review process and what it entails.
Latest News and Blog Content
Most well-established debt counsellors’ websites have latest news or blog pages. Their news should be accurate and true to provide industry-standard information.
Inaccurate or false content signifies that the debt counsellor or scammer is not up-to-date with industry happenings and should not be engaged with.
Contact Details
Their website should list contact details, such as an address, telephone number, email address, open hours, and registration numbers.
Debtco Group’s telephone number is 021 007 1422. Alternatively, contact us at 071 208 2810. If you would like to email us, do so via applications@debtcogroup.co.za. Our Cape Town office is at Sable Square in Milnerton (office one on the first floor).
You can Google the number or use Truecaller to ascertain whether the number is of a reputable company, ensuring the caller is who they say they are.
Accredited NRDC Registration
Your debt counsellor should be registered with the National Credit Regulator. If they aren’t, they likely shouldn’t be trusted. The NCR will list their full name, address, registration number, and whether their registration is valid.
NCR numbers are a combination of letters and numbers. The three digits at the end are the registration number.
For example, Debtco Group’s NRDC (National Registered Debt Counsellor Registration) number is NCRDC3277.
Accredited PDA Partnership and Registration
All debt counsellors partner with a PDA (payment distribution agency) to distribute your payments fairly among your creditors. Their PDA of choice should also be registered with the NCR. If it isn’t, they’re likely a fraudulent entity.
Debtco Group has partnered with DC Partner, one of the country’s most trusted PDAs. They’ve partnered with the likes of FNB and iDocs. DC Partner’s NCR registration number is NCRPDA02.
Right now, there are only three registered payment distribution agencies. You should never make direct payments to any debt counsellor. If they ask you to do this, you’re likely being scammed.
Fees Aligned with NCA Prescription
The National Credit Act outlines the fee limit debt counsellors and payment distribution agencies are allowed to charge. Debtco Group’s fee structure follows the NCA’s prescription.
Your debt counsellor’s fee structure should be clearly outlined and easy to understand.
Here are the fees we charge:
Completion and Submission of Form 16 (Application)
R50, payable upfront and in full.
Administration Fee
This fee covers:
- Your consultation, including an explanation of process and fee disclosure
- Form 17.1 process (notifying creditors)
- Loading consumer on the DHS and/or withdrawal process as per Form 17.2(a), including: notifying you and your credit providers, updating the DHS, and compliance with regulation 25
We ask for R300 per debt counselling session, which is payable upfront and in full.
Determination Fee
This fee is determined by the total amount of debt you owe.
Restructuring Fee
This fee is for attending to the Form 17.2(b) process and includes:
- Proposal preparation
- Loading the plan on the debt counsellor’s PDA profile
- Negotiating with credit providers
- Submitting the final proposal
- Supplying Debt Counselling documents to the attorney to draft the court application
- Updating the DHS (debt help system status codes)
- Transferring the consumer
- Instructing the attorney to draft the court application/collating and filing the National Court Tribunal application
- Withdrawal by the consumer (Form 17 [W] process) if applicable
Usually, this fee is equal to your repayment but may not exceed R8,000, or R9,000 for couples married in community of property, whichever is less. It’s payable in month one after the drafting and submission of the proposals.
Reckless Lending Fee
This fee is optional and includes the assessment of whether you were recklessly lent money. It also includes supplying reckless lending documents to the attorney so that they may draft the affidavit on the assessment outcome.
R1,500 is payable in month two after the written outcome of the reckless lending assessment.
Aftercare Fee
The aftercare fee services include the following:
- Form 17.2(c) process
- Review of consumer’s financial situation
- Attending to payment queries
- Clearance process, including securing the paid-up letters
- Withdrawal by the consumer (Form 17. 2 [W] process), and
- Updating the DHS
We charge the prescribed maximum of R450 per month or a fee equal to 5% of your monthly payments, whichever is less. You’ll pay this monthly.
NCT Submission Fee
This fee is for submitting your application with the National Court Tribunal and excludes other court fees. It’s R500 and excludes the filing fee, payable in month two after completing the restructuring process.
Attorney Fee
This fee is to be agreed upon upfront with your attorney. It includes drafting your court application and appearing in court in your capacity. You only have to pay this after one or more credit providers have not accepted the repayment plan, the attorney has drafted the court application, and the attorney has attended the hearing of the court application.
Part of the National Debt Counsellors’ Association
This organisation was established in 2017 and includes some of the industry’s most respected professionals. Any NCDA is a debt counsellor with expertise that you can trust. If your debt counsellor isn’t registered with the National Debt Counsellors’ Association, they likely haven’t met their criterion:
- Registered with the National Credit Regulator (NCR)
- Affordable, reasonable legal fees for clients
- Use the NCR-approved Debt Counselling Rules System (DCRS), which facilitates interest rate reduction
- Use a registered Payment Distribution Agency to ensure clients’ funds are protected
- Provide monthly statements and continuous client support
- Adhere to the moral standards that the NDCA expects
Our NCDA number is 0801. When you work with an NDCA-registered debt counsellor, you’ll have an extra layer of protection and someone to hold your debt counsellor accountable.
Professional Work Space
Your debt counsellor should have an office that’s well-cared for and clean. We accept walk-ins and are situated in Cape Town. Our office is in Sable Square in Milnerton (office one on the first floor).
If your debt counsellor doesn’t have an office or it’s in disarray, they’re likely not well-established or reputable and should be avoided.
What’s Debt Review?
Debt review is a legal process wherein a debt counsellor confidentially negotiates for reduced interest rates and repayments to get you out of over-indebtedness. Through debt review, you’ll gain legal protection, keep your assets, and save on debt repayments.
The Debt Review Process
First, we’ll explain the process and answer any questions and concerns – what any good debt counselling company should do. They should also let you know what resources they have in place to guide you.
Most debt counsellors offer a free assessment telephonically. If you would like, we can do an in-person assessment. No good debt counsellor will propose a repayment structure before assessing you. The least they should ask you for is information about your marital status, income, credit accounts, and living expenses.
Taking all of this into account, they’ll assess your finances and create a rough plan of your repayment capacity.
Application
First, you’ll fill out Form 16 (application form), where you must fill out all of your income, expenses, and debts. This will allow your debt counsellor to assess whether you’re over-indebted. Once your debt counsellor has this information, they’ll inform and ask your creditors for statements of your accounts, then load you onto the DHS.
Negotiation
Then, they’ll begin proposing renegotiated interest rates and paying less on debt with your creditors. Once everyone has agreed, they’ll submit a final proposal. After this, they’ll supply your attorney with the necessary documents to draft a court proposal, and if necessary, conduct a reckless lending assessment (which can get part or all reckless debt written off).
Court Submission
Once the court application, your attorney will submit it to the National Court Tribunal, who will make the final call on whether you’re over-indebted. If they decide you are, you’ll begin making payments with an accredited PDA, which will distribute your payments fairly among your creditors every month. Once you’ve paid all your debts, you’ll be eligible for a clearance certificate (Form 19).
After Debt Review
You can submit your clearance certificate to the bureaus to have all debts that led to debt review and its flag removed from your credit profile. Then, you’ll be able to begin rebuilding your credit responsibly.
Why Debtco Group?
For 15 years, we’ve helped hundreds of South Africans take control of their financial futures through fair and expert debt counselling. Debtco Group can help you remotely (telephonically) or in person, helping you achieve your dream of a debt-free life.
We’ll protect you from legal action, reduce your repayments, and lessen your interest. Contact Debtco Group today and discover true financial freedom.