Consumers will no longer have to carry any costs of payment distribution following an agreement between the National Credit Regulator (NCR) and credit providers.

"Currently, the cost of distribution is borne by consumers. Once this arrangement is implemented, it will ease the burden on over-indebted consumers," said the NCR's Peter Setou in a statement on Tuesday.

In line with the agreement, the credit providers had agreed to carry the costs of distribution at a set fee per amount being distributed, he added.

The arrangement would apply to all proposals received by credit providers after 1 September. It would not be applied retrospectively.

In terms of the National Credit Act, debt counsellors were required to register with the NCR. However, a debt counsellor was not authorised to receive consumers' payments and distribute them to various credit providers.

According to the NCR, the amounts payable for the cost of distribution was a fee of R7 for each payment between R1 and R200 distributed in respect of each credit agreement included in the consumer's debt re-arrangement plan. This increased to R15 for each payment between R201 and R500 and R25 for each payment above R501.

Sapa