The FCM whole-heartedly support the obligation to train and up-skill people as provided for in the National Credit Act and the Regulations to it. The NCA (section 163) and the Regulations to it (Chapter 5) provides the scope of the training. It needs to be stated that the Consumer Credit Industry finds itself in a position where it is “matured” and “new”. Matured in the sense that we have Credit Providers and Debt Counsellors who are registered since 2007 and then we have new entrants into the market as well as new “role-players” such as the Payment Distribution Agents and Alternative Dispute Resolution Agents. In order to provide the training, envisaged in the NCA and the Regulations to it, one has to clarify “who” receives “what” training.

Firstly: the National Credit Amendment Act 19/2014.
Sec 163 (1) A credit provider, debt counsellor or payment distributing agent must ensure that its employees or agents are trained in respect of the matters to which the NCA applies.
Section 163 (1A) The Minister must prescribe the requirements and standards for the training contemplated in subsection (1).
Section 163 (1B) Until the regulations envisaged in subsection (1A) have been made, credit providers, debt counsellors and payment distributing agents must ensure that its employees or agents are trained to such an extent that they can contribute to the purpose of the NCA.

Secondly: the National Credit Regulations that came into effect on 13 March 2015.
Regulations to the NCA - Chapter 5 - Part D - Requirements and standards for training of Registrants:

(1) Payment Distribution Agents must be trained in the following areas:
  • risk management and fraud prevention
  • the National Credit Act
  • financial management
  • accounting
  • business management
  • customer service
  • governance and compliance
  • computer literacy

(2) Credit providers must be trained in the following areas:
  • the National Credit Act
  • governance and compliance
  • customer service
  • risk management
  • computer literacy
  • financial management
  • business management
  • economics

(3) Debt Counselors must be trained on the National Credit Act and on the basic principles of the following areas:
  • financial management
  • business management
  • customer service
  • debt counselling
  • economics
  • governance and compliance
  • accounting
  • bookkeeping

(4) Alternative Dispute Resolution Agents must be trained on the National Credit Act, Consumer Protection Act and on the basic principles of the following areas:
  • alternative dispute resolution
  • financial management
  • business management
  • governance and compliance
  • customer service

OBSERVATIONS

A. In section 163 the intention is clear in that it is obligatory for a Credit Provider, Debt Counsellor or Payment Distribution Agent to ensure that its employees and agents are trained in respect of the matters to which this Act applies.

B.
Given the fact that all the parties mentioned in section 163(1) namely: the Credit Provider, Debt Counsellor and Payment Distribution Agent, are normally employers of staff, and the fact that employers are vicariously liable for the actions of their staff, there must be an obligation on the employer to train his staff to be proficient in all the matters that the NCA applies to and to such an extent that they can contribute to the purpose of the National Credit Act.

C.
In chapter 5 part D the intention is clear in that we have to do with individuals opting for registration (registrants) and they must have knowledge of the NCA and the specific areas mentioned in each category of registration.

CHALLENGES

The first challenge we face is that of the “Credit Provider” and “Payment Distribution Agent” AND only in the case of where the registrants in these 2 categories are legal entities. Question begs to be answered: “who must be trained as the registrant in the case of a legal entity?”

The second challenge we face is to clarify what training the employees and agents of the legal entities, that are registered to act as “Credit Providers” or “Payment Distribution Agents”, must receive. Question begs to be answered: “what training must employees and agents, of registrants under the NCA, receive?”

POSSIBLE SOLUTIONS

First challenge: The only possible solution is that, in the case of a legal entity, the legal entity would have to comply with section 163(1) and not 163(1A). A case could be made out that the “officers” of the legal entity have to comply with 163(1A) before the legal entity can register as “Credit Provider” or “Payment Distribution Agent”. The “officers” of the legal entity are the individuals that must ensure that the legal entity’s employees and agents are trained in respect of the matters to which the NCA applies, hence they as the “officers” must be suitably trained in the basic principals as provided for in Chapter 5 of the Regulations to the NCA.

Second challenge: The solution could be that legal entities, registered as Credit Providers or Payment Distribution Agents, are obliged to train their employees and agents in terms of section 163(1) and not section 163(1A) of the NCA. They, the legal entities, must show that their employees and agents are proficient in respect of the matters to which the NCA applies AND that they, the employees and agents, are trained to such an extent that they can contribute to the objectives and purpose of the NCA.