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The Latest Debtfree DIGI

Monday, February 28, 2011

Changes to Transfer Duties

Great news for all prospective buyers – Transfer Duty reduced – see details & samples below:

Purchase price Transfer duty payable

R0 – R600,000 R0

From R600,000 – R1,000,000 3% of the purchase price from R600,000

From R1,000,000 – R1,500,000 R12 000,00 plus 5% to the purchase price from R1,000,000

From R1,500,000 – unlimited R37 000,00 plus 8% to the purchase price from R1,500,000


Previously Companies, Close Corporations and Trusts paid an 8% flat rate of the purchase price as transfer duty irrespective of the purchase price which made it very expensive to purchase properties in legal entities. From the 23rd of February 2011 Companies, Close Corporations and Trusts will pay the same transfer duty as natural persons.


Natural Persons:
Transfer on purchase price of R1,000,000

Old tariff R25,000
New tariff R12 000
Saving R13 000

Transfer on purchase price of R1,500,000

Old tariff R65,000
New tariff R37,000
Saving R28 000

Legal entities:

Transfer on purchase price of R1,000,000

Old tariff R80,000
New tariff R12,000
Saving R68,000

Transfer on purchase price of R1,500,000
Old tariff R120,000
New tariff R37,000
Saving R83,000

The above changes in transfer duty tariffs will be a great boost to the property industry and should be welcomed by everyone involved.

Friday, February 25, 2011

Free Workshop (Bellville CT) re: Consumer Protection Act

Would you like to know more about the CPA?
No doubt you enjoyed our articles on the subject in recent Debtfree DIGI's. Prinsloo and Assoc. are offering a free workshop on the subject on Thursday 3rd of March 2011 at the Bellville Library.

All are welcome to attend.

Time: 10 till 1pm

RSVP to:

Tuesday, February 22, 2011

SDC site now features a forum for commenting

The SDC website:

now features a forum for DC's to communicate with one another.

Why not give it a visit?

Sunday, February 20, 2011

Wednesday, February 16, 2011

NCR can appoint PDA's

The National Credit Regulator (NCR) has won an important case in the North Gauteng High Court which confirms that it is entitled to accredit Payment Distribution Agents (PDAs) as part of the debt review process.

Under the National Credit Act (NCA), over-indebted consumers are entitled to apply for their debts to be re-arranged through a registered debt counsellor. As part of this process, consumers are still required to make repayments to their credit providers, although this may be at a reduced monthly rate.

Because vast amounts of money have to be collected from consumers and paid to credit providers, the NCR developed a system to control the receipt and distribution of consumers’ payments to the credit providers. From the commencement of the system to the end of June 2010 a total of R2, 1bn had been distributed by the PDAs to various credit providers.

“We found that rearranged payments should not be left to the consumer to make because their over-indebtedness is often the result of them being unable to manage their own financial affairs,” says NCR Senior Manager: Education & Strategy, Peter Setou. “The requirement that payment be made, not by the consumer, but rather by an appointed agent, underpins the effectiveness of the debt review process.”

However, the NCR became concerned about the criminal behavior of some debt counsellors and unaccredited paying agencies, which resulted in consumers’ monies being stolen or not being paid over to creditors.

“If a consumer under debt review fails to comply with the relevant provisions of the NCA whilst under debt counselling, the process can be terminated and credit providers can take legal action to recover the debt,” explains Setou.

To curb the theft of consumer money and maladministration the NCR issued a tender two years ago and accredited five PDAs. This was to prevent the risk of loss to consumers through misappropriation of repayments while consumers were under debt counselling.

“In accrediting these PDAs, audits were undertaken to ensure that such entities have the requisite infrastructure to perform the function of payment distribution,” says Setou. “The NCR also ensures that such entities have adequate insurance cover to compensate consumers in cases of loss.”

But Debt Monitoring SA, which had been collecting money from over indebted customers despite not being an accredited PDA, applied to the High Court to order the NCR to approve them as a PDA. It also wanted the NCR to stop preventing debt counsellors from engaging or rendering payment distribution services to credit providers on behalf of their clients. They argued that the NCR should not impose as a condition of registration that debt counsellors only be allowed to use accredited PDAs.

“If debt counsellors were allowed to carry out payment distribution, the NCR would not be able to monitor and control the system as it is able to do now,” says Setou.

The court dismissed Debt Monitoring SA’s application, with costs.

“This judgment has strengthened the NCR’s resolve to ensure that consumers’ and credit providers’ interests are protected in the debt counselling process,” concludes Setou. The NCR will continue to enforce the Act and specifically ensure that debt counsellors only use accredited PDAs. Consumers are also urged to check whether their debt counsellors are using accredited PDAs. If in doubt they should contact the NCR

Monday, February 14, 2011

SDC dissappointed by NCR

As per the SDC website:

An SDC delegation recently met up with Gabriel Davel and Peter Setou in Randjiespark in an attempt to gain more clarity on various contentious issues surrounding the debt counselling environment. Various issues were discussed, but none more so than the infamous industry Code as we have come to know it.

In response to a question from the SDC as to how such code can be implemented (bear in mind this meeting took place before the 2nd of December without the full support of majority of the debt counsellors), his answer was simple: The NCR was not willing to undo, as Mr Davel put it, the many hours of work already done by the Task Team and in particular Mr Paul Slot (DCASA).

It was made clear that the findings and recommendations of the Task team was considered cast in stone and that the industry would have to abide by it.

Mr Davel did however point out that no debt counsellor would be compelled to apply the formula as devised by the Task team 'to the T'. In other words, a debt counsellor whose client does not fit into the categories created by this industry code will be no better off than before these developments arrived.

On a question posed by the SDC as to representation on a new body consisting of credit providers and debt counsellors it became apparent that DCASA would have a seat on this body.

It was further made known that the NCR would rather see DCASA and the SDC join forces or alternatively create a federation consisting of representatives from both organisations.

It is with the above in mind that the SDC regretfully voice its disappointment towards the manner with which the NCR excluded the debt counsellors from what is effectively law. If you do not comply with these rules, you are 'out in the cold'. Rules you, as an industry player, had no say in.

To say that a given rule is valid, it must be recognized that it has passed all the tests provided by the rule of recognition. The rule of recognition arises out of a convention among officials whereby they accept the rule's criteria as standards that empower and govern their actions as officials.

We, the debt counsellors, are the protectors of the consumer utilizing our expertise. If we have no say in this industry then the ordinary consumers' rights will fall foul in terms of debt counselling. This is especially so in an industry already dominated by the major banks.

Ultimately, debt counsellors should abide by the law set out in the National Credit Act. The NCA provides that an over-indebted consumer, with all the exceptions noted, has the right to be protected against his creditors. The Act assigns no particularity to the kinds of agreement which may be covered by debt counselling. There is also no minimum threshold prescribed for proposed amounts creditors.

From the above it is clear that the rights (to be protected in terms of the NCA) of an over-indebted consumer who is under debt review, is more or less absolute and should not be violated.

We will most probably never reach parity when it comes to steering of the industry and we anxiously anticipate the surprises held by an ever promising 2011!"

to visit the SDC's website go to:

Debt Counselling Industry to be in newspaper spotlight

INDEPENDENT NEWSPAPERS are going to publish a special survey on Debt Counselling on the 25th of February. The Special Survey in Business Report will appear in The Star, Pretoria News, Cape Times and Mercury.

Be sure to get a copy.

Thursday, February 10, 2011

DCASA NEC meeting 2 March 2011- Code of Conduct

On the 2nd of March 2011 the DCASA National Executive Committee will officially pass the DCASA Code of Conduct.

All members will be asked to accept the code. While accepting the Code is not compulsory the NCR are trying to encourage it by posting on their directory of Debt Counsellors who has and has not signed the code. The NCR have also said they will only make recommendations of those DC's who have accepted to callers inquiring about debt counselling. It has also been said that when DC's have to sign their new conditions of registration with the NCR a new clause regarding belonging to a association (such as DCASA or the SDC) along with having signed a code of conduct will be included.

The NCR are promoting accepting the Code of Conduct to assist the Credit Ombudsman in handling debt counselling related disputes.

ABSA's account for clients under review goes country wide in March

In 2010, ABSA piloted a transactional account for customers under Debt Counselling with selected Branches and Debt Counsellors.

The ABSA Solution Account is a basic transactional/savings account, tailor made for customers under debt counselling. It is a cost-effective account, which provides the customer with an alternative banking solution for the debt review market.

ABSA have seen an increasing number of accounts being opened from the inception of the pilot in 2010, outlining the demand for such an account.

Ally Mafunzwaini the General Manager of Customer Management at ABSA now confirms that with effect from 01 March 2011, the Absa Solution account will be available at every branch nationally.

To open account, the following is required:
1. Green bar coded ID Document,
2. Original/ certified copy of utility bill, no older than 3 months, indicating your residential address,
3. Form 17.1 issued by the Debt Counsellor, as proof that client has been accepted for Debt Review,
4. R50 minimum deposit at time of opening account.

The features to this account at a fee of R75 per month are:

ABSA ATM cash withdrawals ABSA ATM cash deposits ABSA ATM balances enquiries and mini statement Electronic fund transfers and Electronic account payment All point-of-sale transactions Debit and stop orders Notify me fees

ABSA want to make sure that all Debt Counsellors know that no “set off`s” can be applied to this specific account.

It remains to be seen if the R75 price tag seems of more value to consumers than Capitec's R4.50 basic account fee.

Wednesday, February 9, 2011

Debt Review Advisory Committee - meeting

The Debt Review Advisory Committee (DRAC) are to meet today to discuss issues pertaining to the DC industry. They will receive a presentation from the, as yet unofficial, Technical Review Committee (mostly consisting of BASA members, although DCASA does have a seat) regarding issues around terminations.

Thursday, February 3, 2011

BASA rules engine - Have you used it?

The much discussed and debated BASA central web based engine
(called DCRS) went live on the 1st of this month.

It is now available to all the PDA associated calculation programs to use. Some of the calculation programs have already integrated this new option into their systems and others are busy doing so. DC Partner's online system Debt Wise is one of those who hope to have the option in place during February.

The predictions where that the DCRS system would provide a solve rate of about 60% of cases.The various banks have promised to co-operate and speed things up if DC's use their calculation engine (if the calculations solve, of course).

If you are a DC and have used the new system why not send us an email and let us know what you do and don't like about the rules engine.

Wesbank V Papier Judgment

This document can be downloaded when you have clicked to read it.

Invite to NDMA meeting in CT- 16 Feb 2011

The NDMA have invited all interested parties to attend a conference regarding recent changes in the Debt Review Process and the new role of the NDMA. It will be held in Cape Town on the 16th of Feb 2011.

RSVP to:

Tuesday, February 1, 2011

Judgment handed down in Papier vs Wesbank

The High Court full bench which was considering the Papier Vs Wesbank case has handed down a judgment in favour of Mr Papier and the NCR.

This is great news for all Debt Counsellors and consumers with debt review applications pending at court.

The judgment compares allowing a Credit Provider to terminate [86(10)] a Debt Review when it has already been set before a court for a restructuring order to "providing the consumer with an umbrella and then snatching it back the moment it starts raining".

The Summary Judgment application was refused and the matter was referred back to the Magistrates Court where the restructuring application is being held.

The essence is that Credit Providers cannot issue termination letters to clients who are paying and have matters set before a Magistrates Court for a Debt Restructuring Order

Keep your eyes peeled for our commentary on the Judgment in the February 2011 issue of Debtfree DIGI.