When the Reckless Debt Indicator
- The consumer did not understand the risks, cost or obligation, or
- The consumer became over indebted as result of the approval of that debt. This means that it was impossible for the consumer, based on their financial position, to be able to repay the monthly installments.
When the Reckless Debt Indicator is exceeded, follow the following steps:
a) Write to the Credit Provider and request the following information be made available within 20 business days: i. Copy of the application form or audio. ii. Copy of the financial assessment. iii. Copy of the credit agreement.
b) If the information is supplied review the application in detail. The aim of this assessment is to determine, if and when the application was approved, one of the following occurred: i. The Credit Provider failed to conduct an assessment as required in section 81(2); ii. The parties entered into the agreement despite the fact that the information indicated that:
c) Should the conclusion be that the lending could be reckless, the Debt Counsellor should inform the Credit Provider of this fact. If no satisfactory outcome can be achieved, refer the matter to the Magistrate Court.
d) If no information is received the Debt Counsellor should advise the Credit Provider that the lending could be reckless and make a recommendation that the debt be written off. If no reply is received before the scheduled Court date, include a recommendation of reckless lending to the Court and let the Court make a decision based on the information provided to the Court by all parties. PROPOSED MINIMUM DEBT COUNSELLING SYSTEM REQUIREMENTS AND PRINCIPLES OF DEBT RESTRUCTURING
NDRC Practice NoteLast reviewed 2026-04
When the indicator triggers, the debt counsellor writes to the credit provider and demands the application form, financial assessment and credit agreement within twenty business days. If the credit provider fails to deliver, the matter goes to the magistrate's court for a finding under NCA s 83.
The twenty-business-day clock is procedural and is enforced by the courts. A late or incomplete creditor response is itself evidence supporting a reckless-lending finding.
Statutory anchor: NCA s 80 to s 84, read with NCR Circular 005/2025 on reckless lending investigation timelines.
Drawn from NDRC's active case work. For your situation, see our debt counselling overview.
Cite this clause
National Credit Regulator. (2015). Annexure B — Debt Review Assessment Guidelines, clause 16.6: When the Reckless Debt Indicator. Guideline 001/2015 (Debt Review Task Team Agreements 2010), p. 53.