May
31
Indebted consumers ‘harassed’
Johannesburg – Indebted consumers pay back R320m each month, but creditors still harass them, debt counselling company Consumer Assist said on Monday.
“Debt counselling sees more than R320m a month get paid back to creditors and 91% of creditors – a rise of 6% – say more consumers are making arrangements to repay debt,” Andre Snyman, CEO of Consumer Assist, said in a statement.
“Debt repayments have leapt almost 20 times in two years – in June 2008, they were a mere R11m, according to the National Credit Regulator.”
He said consumers were showing significantly more responsibility when it came to paying back debt but still many creditors had adopted an aggressive stance toward those trying to restructure debt.
This included persistent phone calls often late at night, threatening letters and even visits to consumers under debt review.
These actions were illegal in terms of the National Credit Act, but served to intimidate consumers.
“Every R1 a consumer pays back of debt represents a saving of at least R2 to creditors instead of pursuing debt using lawyers, debt
collectors and the courts.”
The Consumer Financial Vulnerability Index (CFVI) carried out by the Finmark Trust and the University of Pretoria’s Bureau of Market
Research showed that those creditors that believed more consumers were arranging to repay debt had jumped to 91% from 85%.
“Three of the four main components of the CFVI improved in the first quarter of this year – savings, debt servicing and income,”
Snyman said.
But although billions of debt was repaid last year through debt counselling, the war between creditors and consumers continued.
“The National Credit Regulator said at the end of March that monthly payments to creditors by people under debt counselling
exceeded R160m through payment distribution agencies,” Snyman said.
79% of consumers happy with outcome of debt counselling
This represented around half of all debt and the total being paid back each month was closer to R320m.
A task team at the National Credit Regulator (NCR) said obstacles to greater debt counselling success were often caused by weaknesses in the policies and procedures at creditors for dealing with debt counsellors.
Credit providers refusing to accept debt counselling had also caused two year court delays for debt counselling cases, Snyman said.
NCR ombudsman Gabriel Davel said the task team had found that debt counselling had assisted consumers to deal with the negative
impact of the financial crisis.
Davel said debt counselling might also have helped to curtail repossessions and prevent a decline in the housing market.
Snyman said a recent survey found that more than 79% of consumers were happy with the outcome of debt counselling.
The NCR task team proposed that credit providers improve policies and procedures including greater co-operation between different business units in restructuring debt and improved administration to ensure that credit providers did not delay cases.
Snyman quoted a recent issue of attorney’s journal De Rebus as saying: “It is the job of the debt counsellor to render a specialised forensic service to the consumer.”
The work debt counsellors did was often underestimated, it had to stand the rigours of a judicial process and be acceptable to the top legal minds employed by major creditors at banks and retail outlets.
“We use specialised software developed in South Africa to ensure that administration exceeds best practice.”
- Sapa
May
10
The Credit Ombud gives Hope
Credit Ombud does unhappy consumers a power of good May 8, 2010
By Neesa Moodley-isaacs
The powers of Manie van Schalkwyk, the Credit Ombud, were extended at the beginning of this year, and his office should be your first port of call if you have a complaint against a credit provider or credit bureau.
Previously, the ombud’s office dealt only with complaints against credit bureaus.
The ombud’s increased jurisdiction is intended to ease the workload of the National Credit Regulator (NCR), which will focus on the regulation of credit providers and debt counsellors.
While the NCR is responsible for the regulation of interest rates creditors charge you, any complaints you have regarding creditors or the interest you are charged can be taken to Van Schalkwyk’s office.
However, if you are dissatisfied with a ruling made by the Credit Ombud, you can take your complaint against a credit provider to the NCR for further consideration.
Van Schalkwyk says his office has resolved several cases since January. Three of them were:
- Payment not reflected. Robert Richardson thought his account with a credit provider was up to date. His statement for December last year reflected a balance of R405.59, which he paid in full on November 28.
However, in December he started to receive calls from the credit provider requesting payment. Richardson went to the store where he had made the payment and asked the manager to help him resolve the matter. The manager twice faxed a copy of the payment receipt to the company’s head office, but Richardson continued to receive calls claiming that he had not paid.
On December 18, Richardson went back to the store and asked the manager to refund his payment, which he then repaid to the store to settle his account for the second time. However, the credit provider’s head office still claimed that Richardson’s account was in arrears and refused his request to close the account.
Numerous calls to the company’s customer services centre also failed to resolve the problem, and on January 26 this year Richardson complained to the ombud.
In its response to the ombud, the credit provider acknowledged that a computer error had resulted in some payments being reflected as purchase refunds. The error was rectified and Richardson’s account was settled.
- Billed in error. Moses Buthelezi had an account with clothing store A. In February last year, he noticed that another company, store B, had started to deduct R55 for airtime from his account with store A.
In October, Buthelezi complained to store A and was referred to someone at store B, who promised to address the complaint within 24 hours, but this failed to happen. Buthelezi continued to complain to store B. On three different occasions, he spoke to three different people, none of whom could help him.
On January 19 this year, Buthelezi complained to the ombud that he had not entered into an agreement with store B and had not received any of the airtime for which he was being charged.
Store B confirmed to the ombud that Buthelezi had been billed in error and agreed to reverse all the charges, which amounted to R385.
- Garnishee order. Vusi Mazibuko had a garnishee order on his salary. He paid off the debt and had the garnishee order rescinded and removed from his credit profile.
However, the following month, Mazibuko found that the garnishee order was still in place and that R2 820 had been deducted from his salary.
He contacted the Credit Ombud on January 27 this year for help. The ombud ruled that the garnishee order must be cancelled. The creditor, a microlender, refunded R2 659.26 to Mazibuko. The difference of R160.74 was the administration fee his employer charged for administering the order.
May
05
Application for Bonds have become tough
New tactics
With the steady increase in bond applications, the banks are now taking
longer to give clients a decision: very often a considerable amount of
time is spent in getting additional information and checking on statements,
before a bond is granted
This can lead to the expiry date by when the bond must be granted, being
exceeded, which, in effect, means that the offer to purchase is no longer
valid.
The clause in the deed of sale, relating to the bond grant is a suspensive
condition, usually with a fixed completion date. If this suspensive
condition is not fulfilled, by the stipulated date, the contract is
automatically invalidated. However, in practice, when the expiry date
approaches, the agent and the buyer will usually ask the seller for a time
extension – which the seller in most cases will give.
Apr
21
Debt Counsellors have a duty to make all debt review applications to Court
The National Credit Act was fully implemented in 2007 and Debt Counsellors now have a duty to make all debt review applications to Court.
We as Debt Counsellor’s must subpoena all the creditors to court. Some creditors don’t adhere to the National Credit Act therefore once a creditor is Subpoena to Court. When a client receives a letter of demand we can still proceed with a Notice of Motion order that we have received from the Clerk of the Court. The Notice of Motion order has the court date, that is usually the Legal document that creditors require to Pend all Legal action.
RusselI Damon NCRD263 a Registered debt counsellor at JJerr Consulting firmly believes if all debt counsellors make Court applications to court. Creditors will have a back foot in the industry. Creditors intend to put additional interest on their clients’ accounts. And yes they do have the right to do it. But this entire blow up in proportion as extra interest accumulates. When a matter is at Court creditors must pay more cost for attorneys. As Debt Counsellors we notify our clients what the legal fees will be. This past week I have been placing matters on the Court Roll. It took so much time but it is worth the effort as you see your client happy.
We as debt Counsellors are moving in the right direction. Building a relationship with the creditor is also a must as you can pend the legal action. You can also get a consent order from the creditor as some creditors want to avoid going to court. A Consent order is where the creditor accepts the agreement that the debt Counsellor offer. How lovely it will be if all creditors can agree to consent orders. Let’s face the creditors in Court. The pressure is always there for the debt counsellor to obtain a sooner date. Only the Magistrate can make a final ruling regarding the client’s debt arrangements.
Apr
12
Municipal Rates increase in Cape Town
Last week we heard the announcement of a municipal rate increase for Cape Town residents. The increase should be in the region of 7.7%.
This will no doubt affect many who are running on a tight budget.
How will this affect you as a consumer?
When doing a budget one can ignore the increasing rates or higher food costs if you are sure your salary will increase at a similar or higher rate than such increases in cost of living.
However if your salary is not increasing do remember that such increases will mean less available cash after covering your necessities monthly and you may need to begin supplementing your income.
Apr
06
10 years of consumer protection news
The National Credit Act (NCA) has been acclaimed as one of the reasons South Africa has not been as badly affected by the global economic turmoil as have some other countries. This is because the Act has limited the potential for South Africans to borrow too much, while it has prevented banks and other credit providers from engaging in the irresponsible lending practices.
Click here to read more Link: http://www.persfin.co.za/index.php?fSectionId=590&fArticleId=5412987
Mar
29
Needs, wants and financial goals
Q: My husband and I just bought our first home. I’m not sure if we can afford it and our lifestyle, but he wants both. How can we talk about this without fighting?
A: When we marry, many of us focus on the honeymoon and forget about the richer or poorer part of our daily life afterwards. When we buy a home, we assume that if the bank approved us then we must be able to afford it.
Unfortunately, the bank doesn’t take into account all of your monthly expenses, debt payments and money directed into short and long-term savings, let alone your lifestyle. For most, a home is the single largest purchase you will ever make. Often, it means a change of lifestyle needs to follow.
It sounds like you and your husband need to have a serious chat about expectations, needs, wants and financial goals. Here are some questions to get you started:
Current financial status. Work through these questions together: -What is your household income? -Your monthly expenses? -Value of assets? -Debt payments?
Financial priorities. Work through these questions separately and then come together to discuss: -What are my financial priorities, for example, debt repayment, savings, retirement and lifestyle? -What are my short, medium and long-term financial goals?
Action plan. After discussing your financial priorities, work through these questions together and develop a plan that incorporates the most important things for each of you: -What are the first three things we need to do to get back on track? -How will we stay on track? -What is our communication plan to stay on track? -What is our reward for staying on track?
Find small ways to balance each other’s priorities and make the house you own your happy home.
Mar
15
Overcome the Impossible
Debt, especially large debt, can be an overwhelming mountain that seems almost impossible to conquer. Though there are definitely advantages to tackling it alone, it may not always be an easy road.
Discipline
Generally speaking, it is a lack of financial discipline that gets people into debt, though there are those rare cases where unforeseen events and tragedies incur financial disasters. No matter how you got there, getting out of debt requires strict discipline. Being disciplined demands sticking to Budget.
Negotiation
Negotiating the settlement of debt can be a tough process, and very often the results depend on the skills and knowledge of the negotiator. For this reason, debt settlement is usually far more successful when done by an unemotional third party.
Getting Help
If the idea of renegotiating with your debtors on your own seems like a bit too much to deal with, Call our office for more info and our consultants will be more than happy to assist.
Mar
03
Counselling and Rehabilitation Empowerment
The JJerr team once again set out to equip themselves with the necessary skills to achieve optimum output levels.
We attended the DCM Care Premier launch in Cape Town held at the fire and Ice Hotel.
DCM (Debt Control Management) since its inception in 2007 became a well known brand within the Debt Counselling industry.
The new operating system looks promising and will be more Comprehensive and Efficient.
The new system includes the following features:
- A Web based solution accessible anywhere, anytime
- Effective work flow functionality
- Generate automated messaging to clients and creditors (E-mail & sms)
- Manage branch networks and user rights
- Paperless System
- Ability to add reminders
Our team is proud to announce we will be using this new system to ensure our clients get the best products available, because we CARE….
Feb
22
Pawnbrokers To Comply With NCA (National Credit Act)
With South African consumers under tremendous financial pressure, the pawnbroker business has seen quite a rise in individuals coming to lenders for financial assistance.
Pawn transactions are classified as ’small’ credit agreements (either short-term or ‘other’) under the NCA and interest rates charged are regulated, as are pre-agreement statements and quotations. This means that fees and interest must be within maximum prescribed limits. Compliance with all relevant NCA provisions is monitored by the NCR.
For more info click here
Howdy. Welcome to JJéRR Consulting and Counselling Services!
Thanks for dropping by! Feel free to join the discussion by leaving comments, and stay updated by subscribing to the RSS feed. See ya around!
