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What is a Credit Provider Termination?

credit provider termination

Table of contents

1. Reasons for account terminations

2. Process followed to terminate the account

3. Impact of the account being terminated

 

A credit provider termination is when they remove a consumer's account from the process of debt counselling.

 

When would a credit provider terminate an account from debt counselling? 

  1. When the credit provider does not receive the specific agreed-upon amount, the consumer is in default of the arrangement and the credit provider will have the right to terminate the account from the process.

 

How does a credit provider terminate an account from the process?

  1. The credit provider will send a notification to the consumer, the debt counsellor, and the NCR to notify all parties that the consumer is in default of the payment arrangement under debt counselling.
  2. The credit provider will give the consumer 10 days to rectify the default by settling the arrears or making a payment arrangement for the arrears.
  3. Failure on behalf of the consumer to rectify the situation will lead the credit provider to terminate the account from the process.

 

What happens once the credit provider terminates an account from debt counselling?

  1. The specific account will lose the benefits of a lower installment and lower interest rate and revert to the original agreement where the consumer will become liable to pay the original installment at the original interest rate. 
  2. The account will also no longer be legally protected as the credit provider may proceed with legal action on the account to claim the full outstanding balance on the account.
  3. Legal proceedings however take time on the credit provider’s side.
  4. On our end, depending on the credit provider’s discretion, we can continue making payments towards the account via the Payment Distribution Agency.
  5. Should the consumer continue making payments for at least 3 consecutive months, we can send a letter of motivation to the credit provider to secure the account back under the process at the creditor's discretion.