An ugly turf war between debt counsellors and debt collectors is brewing as courts struggle to clarify the National Credit Act and creditors try to undermine the spirit of the act.

Matimba Management and Labour Consultants' debt counsellors are right in the middle of this war as they try to battle the giants of the financial industry.

Yesterday, they were to argue what they termed the provision of reckless credit and subsequent illegal actions to repossess goods from their clients by SA Taxi Finance (SATF).

But the matter was postponed until Wesbank finalises an appeal of a judgment that set a precedent for the National Credit Act.

In November Sowetan published articles that SATF had been accused of flouting legislation and using bully tactics to repossess vehicles from taxi owners who were buckling under heavy debt.

The Western Cape high court provided clarity on the processes to be followed in relation to debt review and when and how credit providers were to repossess goods in the Deon Papier matter in February.

Though not involved in the case, the judgment upheld Matimba's stance and the processes it had been following.

Noxolo Sono of Matimba said: "Clients come to us when they are over-indebted and apply for debt review, which suggests that at least one of the creditors was reckless in lending. We assess the client's financial obligations and if indeed over-indebted, we send a letter to the credit provider that the client is under debt review, and apply to the magistrate's court for an order of reviewed instalments.

"Wesbank and SATF would send a letter of termination of the debt review process. That is illegal," Sono said.

"We inform them of the case number in the magistrate's court and proof of payment according to the revised instalments.

"But they nevertheless send debt collectors who, in 90percent of the cases, make the clients sign surrender of goods letters under the false pretext that it is a summons from court."

An order by three high court judges, including the deputy judge president, in the Papier matter said credit providers had no right to issue termination of debt review letters and could not obtain warrants of execution from high courts while the matters were in the magistrate's courts.

Matimba was further vindicated this month when it won a battle against Wesbank in the Pretoria high court.

Katlego Mornalle, also of Matimba, said banks should ensure their employees understood how the NCR worked.