National Consumer Tribunal Annual Report 2011/12 National Consumer Tribunal 2011-12 | Page 46

Adjudication (continued)
The Regulator sought the cancellation of registration of Barry Kotze as a result of his repeated
contraventions of the NCA. The Regulator was of the view that Kotze contravened the NCA and
the regulations in the following ways:
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He failed to determine over-indebtedness within the prescribed period (Section 86(6) and
regulation 24);
He failed to issue proposals to credit providers (Section 86(7) and regulation 24).
He failed to provide consumers with rejection letters in cases where he determined that the
consumer is not over-indebted (Section 86(7)(a) and regulation 25).
He failed to refer matters timeously to court (Sect 86(8)(b)).
He failed to keep proper records of debt counselling matters (regulation 55). He furthermore
contravened regulation 55 which states that a registrant (in this case the debt counsellor)
must keep proper record of all registered activities, for example, the application for debt
review, debt restructuring proposal and other documents.
The contraventions included contraventions of his conditions of registration in that he used a
non-approved payment distribution agent (PDA), resulting in irregularities with regards to the
administration and accountability of funds paid by clients and earmarked to be distributed to
various creditors of consumers. Because the money received by this non-approved PDA was not
forwarded to the credit providers, many consumers lost their money and property.
The respondent was also accused of charging consumers in-distress amounts to which he
was not entitled. The respondent, operating as a debt counsellor, and having gained access to
these consumers in this capacity, also charged consumers for legal work which was inextricably
allocated to his law firm Barry Kotze Attorneys Inc.
The Tribunal cancelled the registration of Kotze with immediate effect, ordered a full audit of
all monies received by him in his capacity as a debt counsellor; and ordered such funds to be
refunded to consumers.
Two legal issues were raised by this case. First, how does the NCA deal with lawyers who
contravene the NCA while ‘doubling up’ as registered as debt counsellors? Second, the Act
needs to be amended to clarify the issue and status of PDAs. Kotze was not the first respondent
to challenge the status of approved PDAs, claiming that the legislation does not specify that
payments to creditors must only be effected through approved PDAs.
12. In the case between Niser Tiseker v Standard Bank (NCT/719/2010/141(1)(P))
This matter was also referred to the Tribunal by the complainant following a notice of non-referral
by the Regulator. The Tribunal requested that the parties address the Tribunal on the issue of
jurisdiction before it granted leave for the matter to be heard. The parties addressed the Tribunal
and the Tribunal issued a judgment in the matter regarding the issue of jurisdiction. The Tribunal
held that it did not have jurisdiction to hear the matter, as the matter involved a contractual
dispute between the Bank and the complainant. The Tribunal does not have jurisdiction to deal
with contractual disputes as these must be dealt with in the civil courts. The Tribunal only has
jurisdiction to deal with prohibited conduct and the complaint did not involve an allegation of
prohibited conduct.
Annual Report 2011
page 44 | national consumer tribunal