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Wednesday, August 31, 2011

NCR charge Peter Setou of fraud & misconduct

Mr Peter Setou has been on "special leave" from his post as Education Officer at the NCR. When put on "special leave" Mr. Setou appealed to the CCMA and asked that he not be put on "special leave"...or at least he was told the reasons why.

The CCMA did not see him go back to work at the NCR but did set a deadline for them to put their money where their mouth was (so to say). The NCR were given until the end of August to formally charge Mr Setou or to allow him back to work.

Rumors as to the reasons for the special leave abounded and the NCR remained silent till the last minute when they have now formally charged Mr Setou with Conflict of interest involving granting work to companies of which he was a member, Fraud involving changing figures on quotation documents so as to allow the consulting firm hie is a member of to have the lowest quotation for work (and thus to get the work) and other cases of misconduct.

Another charge relates to Mr Setou breaking the conditions of his "special leave" in discussing the matter with the press.

Mr Setou has said that all these things have been investigated before and that he is not guilty. The Hawks and public prosecutor are involved and there will be a hearing during the month of September in this regard.

The investigation essentially takes Mr. Setou out of the running for the post of CEO for the NCR regardless of the out come of the matter.

When contacted the NCR declined to comment further.

ABSA to change controversial wording of Section 129 letters

Recently ABSA started using a new Section 129 letter which was somewhat...ambiguous about the effect of the 129 on debt review. Paul Nieuwoudt of Munnik & Associates-Munnik Debt Counseling lead the charge by many concerned DC's in regard to the wording.

ABSA have now decided to change the controversial wording of their Section 129 letter after considereding the issue that Mr Nieuwoudt raised in his open letter and in the interest of further improving consumer education to their customers. They have stated that they do not admit to any contravention of the banking code of practice but will now be making a change to these letters.

Mr. Nieuwoudt stated that he feels this is a victory for the DC industry.

Appeal based on Collett v FRB (DCASA call for help)

DCASA has agreed to provide financial support for a new appeal using Collett v FRB Judgement
(Particularly Acting in good faith and referral to Magistrate Court in terms of Section 85)
They have made a call for members (and others) to help out with the cost:

"

Please support this appeal by contributing to the DCASA Legal Fund

Leave to appeal has already been granted in this case.

Merits of the appeal will use the principal of acting good faith in terms of the Collette Judgement. If successful the merits of each case should be reviewed in each individual termination.

The second issue is to request the Appeal Court to agree that the credit agreement has to be referred back to the Magistrate Court to consider the reasonable proposal was considered.

The facts in this case is as follows:


FNB requested a postponement in Magistrate Court and this was allowed. Instead of lodging opposing papers they terminated and proceeded to obtain Judgement which was granted by the High Court. This matter started before Collette but Judgement granted after.

The Client has obtained leave to appeal and will request the Appeal Court to agree that the Credit Providers has to comply with all reasonable proposals and participate in good faith ....... if they don’t comply a resumption of the process may be ordered. Bulk terminations cannot be acting in good faith.

The second issue will be to request the Appeal Court to agree that where a request for Judgement is received the Court has to establish if the CP acted in good faith and reasonable. The only way to do this it to refer the matter to Magistrate Court in terms of Section 85(a) and (b). If the Magistrate finds the proposals is reasonable, client paying then the matter should be allowed to be finalised in Magistrate Court.

DCASA members are requested to support this appeal by donating an amount of R200.00 (or more) per member to the DCASA Legal Fund. DC’s have to stand together on this issue. DCASA has already agreed to pay for the cost of the appeal. An attorney and Senior Council has already been appointed and briefed.

The NCR has also been requested to join as Friend of the Court.


Contribution to the legal fund can be made to the DCASA Bank Account.
Details is as follows:

Account Name: DCASA

Bank and Branch: Standard Bank, Greenstone

Branch Code: 016342

Account Number: 24 0380 614

Reference number: Surname-legal

for more info contact DCASA

Tuesday, August 30, 2011

Latest Dates for Compuscan Academy Conference

Please note the recent date changes




























New Pricing for DW system usage


Debt Wise have announced that the Debt Wise program hire has been restructured as from 1 September 2011



The previous starting price was: R240 per folder plus an additional R49.50 per user and once you exceed 100 consumers in distribution an additional R81 for every 100 consumers was charged.

This whole structure has now been reworked to provide our clients with the best possible software at a very competitive price!



Example:

If your office has one folder = R240.00

Four users @ R49.50 each = R198.00

Hundred and fifty consumers in distribution = R 81.00

Total = R519.00 p/m

VAT + R 72.66

Total cost to company R591.66 p/m*



The new program cost will be structured according to how many consumers you have in distribution:


















ONLY consumers IN DISTRIBUTION will be charged.

There will be NO CHARGE for cancelled consumers or consumers in processing!!



The grouping of companies and the different branches



A- IF you have multiple PDA folders (branches) listed under your company and the head office bears all the cost for the various branches you will only be charged for the total consumers in distribution throughout your various branches. This will result in a huge saving for the company as there will be no charges for individual branches - (branches are also referred to as PDA folders).

B- There will also be no additional cost for users, thus, each individual employee can now have their own password at no extra cost. This will enable you to keep track of all the changes made by your employees to each consumers application on the Debt Wise program (using the saved logs on the tracking screen).

C- If each branch is responsible for their own program hire ,the consumer bundle charges will be applicable to each branch, these branches must be listed as split accounts under the PDA folder management tab and will receive separate invoices each month.



Note the following:

Program hire will still be deducted from the DC fee payments (unless an alternate arrangement is already in place).

Where a company as entity is responsible for the hire , it will be deducted from all branches until the cost is covered (this is as at grouping A).



Please feel free to contact Debt Wise at any time if you have any questions or requests.



Contact

Willie Boshoff OR Arnold Steyn in George

(044) 873 4440 ; (044) 873 4530 ; (044) 873 4532

Extension 103 or 115



OR



Konstant De Vos OR Francois Van Zyl in Pretoria

(012) 348 7624



Regards

Debt Wise

Friday, August 26, 2011

Wednesday deadline for NCR to inform Peter Setou of reasons for special leave

By Thursday next week Mr Peter Setou , who has been on "special leave" from his post at the NCR might be back at work.

When asked to go on special leave Mr Setou approached the CCMA to complain. They ruled that it was permissible for him to be asked to do so but that the NCR had to officially inform Mr. Setou of the reason by Wednesday 31st August or he could return to work. Since the reasons might be very serious the NCR have held off on doing so for as long as possible.

The reasons, when they come to light, will be very interesting especially amidst all the recent accusations and investigations that have been flying back and forth.

It might be better to get the reasons out there and have less confusion and doubt in peoples minds. It will also then be clear whether Mr Setou might still be in line to head up the NCR. The announcement in regard to a new CEO for the NCR is scheduled for September so this will be pivotal for him.

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Want to know what the latest decision by the Constitutional court about the Collett v FRB matter will mean for you? Then read this months new issue.
The public will have access to the latest issue from Monday the 31st Aug 2011.

Monday, August 22, 2011

Hawks swoop down on NCR leadership



If you have not had a chance to read the article or the recent article in the Business Day then here is the skinny:

There have been allegations of questionable business practice at the highest levels in the NCR by staff past and ("special leave" aside) present. As a result, to see if theses claims hold weight, there is now an investigation going on (there have been two internal investigations which had not resulted in action till this time).

The CCMA have also insisted that the NCR inform Mr Setou of the reasons for his special leave or that they let him come back to work on 1 Sept 2011. He has however been barred from discussing this with the press ...at least directly, since the recent Business Day article mentions his opinion in one paragraph...(this may be a wording error by the writer).


Thursday, August 18, 2011

The NDMA - who are the?

The NDMA an institution that initially was set up by the Banking and Credit Provider associations arguably to try lead consumers away from debt counselling, recently changed its profile to that of being a watch dog for Credit Provider misconduct and a center to assist in resolving matters between upset consumers and frustrated Debt Counsellors who are not having joy with Creditors who refuse to assist them.

The NDMA have made the following comment:

“Consumers are not aware that the National Debt Mediation Association (NDMA) provides free debt mediation and complaints handling service,” says CEO of the NDMA, Magauta Mphahlele.

The NDMA is a non-profit organisation designed to assist over-indebted consumers by resolving their indebtedness where possible through debt mediation. It is also empowered to receive and resolve complaints by consumers or debt counsellors against credit providers who subscribe to the Code.

“Complaints can be about the handling of the debt counselling process by the credit provider as well as how they handle consumers experiencing payment difficulties,” adds Mphahlele.

Under the National Credit Act (NCA) consumers experiencing payment difficulties can take advantage of various legal and voluntary options to resolve their problem. This includes direct negotiation with their credit providers or approaching a debt counsellor where the level of over indebtedness is severe.

“The NDMA receives complaints and enquiries from consumers who are under debt counselling as well as from those who are not,” explains Mphahlele. “For those under debt counselling the majority of cases relate to the process going wrong and as a result credit providers resorting to legal action to recover what is owed to them.” She says in such cases most complaints relate to the termination of debt review which is usually followed by legal action to realise the asset such as a car or house.

Following intervention by the NDMA, credit providers agreed to reinstate 47% of terminated cases back into debt review, 54% of vehicles repossessed and 48% of houses due for auction. “By working together with credit providers and debt counsellors, we were able to ensure that consumers enter into agreements to restructure their debt obligations, maintain affordable repayments and therefore retain their cars and remain in their properties,” she adds.

The rest of the cases were still pending or in some cases had a negative outcome. Mphahlele explains that where there was a negative outcome, it was because consumer had sought assistance very late; were not in a position to afford the restructured repayments; made sporadic payments which could not be re-instated; or paid less than agreed under the debt review process.

“Some consumers were simply unwilling to downgrade their lifestyles to increase affordability,” she says. “Others did not provide the necessary supporting documents.”

But in other cases the asset had already been repossessed or auctioned and the matter was too far advanced in the legal system for it to be rescued.

“The lesson here is that if you’re running into financial trouble and start to receive legal letters from your credit provider, act immediately,” she says. “The sooner you approach your credit provider or the NDMA for assistance and advice, the more chance you have of saving your house or car.”

Mphahlele says it’s vital for consumers to keep good records, such as proof of payment slips to ensure that supporting documentation can be provided if required.

In other cases credit providers seemed to be unwilling to negotiate with consumers on a case-by-case basis. “They issued standard responses and were slow to respond to requests for help,” she explains. “Many credit providers still operate in silos, with product, debt review and legal departments all operating separately and little co-ordination or sharing of information.”

Debt counsellors were also to blame for negative outcomes in some cases, being slow to implement new or revised debt review proposals, not keeping the consumer up to date and failing to provide the required documentation to credit providers.

Following an analysis of the complaints it received, the NDMA has identified some areas for improvement including credit providers providing leniency for paying clients and reinstatement of credit agreements in deserving cases.

“Putting in place simple steps, such as ensuring that notifications have been sent to the correct address, that the customer’s payment status is verified before their debt review is terminated and better co-ordination between the product, debt review and legal departments could improve the success rate of mediated outcomes where the consumer is doing their best to maintain reasonable payments,” she says.

From debt counsellors’ perspective, debt counsellors need to improve their capacity to deal with volumes of applications, communication with consumers at each step of the debt review process as well as ensure the process is finalised within the required timeframes.

“Mediation is being increasingly recognised as the better alternative to litigation in many areas and debt mediation is no exception,” says Mphahlele. “Debt counsellors need to refer disputes to the NDMA as soon as consensus cannot be reached in order to avoid lengthy and expensive litigation when mediation could yield a better outcome for all parties involved.”

Wednesday, August 17, 2011

NCR Quarterly report

DC's don't forget to send the NCR your form 42 reports...by today.

Credit Ombud helps in closing loopholes in the debt counselling process


Thousands of indebted consumers enter the debt counselling process each year in the hope that it will help them out of the debt trap. But many consumers find themselves facing the loss of their home and other valuable assets, despite renegotiating and paying lower loan repayments with their credit providers.

“The most important thing to remember if you’re under debt review is not to abandon all responsibility to your debt counsellor,” says Credit Ombud, Manie van Schalkwyk. “Check your balances, payment history and follow all correspondence from credit providers closely.”

There are 1978 registered debt counsellors, of which more or less 850 are active. Approximately R230 million was distributed to creditors each month and more than R4,7 billion since May 2008. Up to July 2011, 263 601 consumers had applied for debt review.

The Credit Ombud which has been effective in assisting consumers to resolve disputes involving credit bureau listings as well as disputes with credit providers, recently had its jurisdiction extended to cover debt counselling disputes. The office handles disputes against debt counsellors, the way in which monies are distributed by the payment distribution agent, or the way in which the credit providers, including the banks, handle credit related matters.
“The general view is that there are numerous problems with the debt counselling process,” says van Schalkwyk. “These are compounded by some dishonest and inefficient debt counsellors as well as credit providers who are more interested in the bottom line than in assisting over-indebted consumers,” says van Schalkwyk.

The debt review process was introduced under the National Credit Act (NCA) as a way for over-indebted consumers to try to settle their debt after re-negotiating affordable repayments with the credit providers. The law entitles consumers to consult a debt counsellor who does an assessment to determine the extent of the consumer’s indebtedness. The debt counsellor then communicates with all credit providers and submits a repayment proposal, restructuring the consumer’s debt repayment. If the proposal is accepted, the consumer continues under the debt review process until all the debt has been repaid.

“From the complaints we have been seeing though, credit providers often don’t accept the first proposal as they may feel the repayments proposed are too low,” explains van Schalkwyk. “The credit provider then sends a counter-proposal and if this isn’t accepted, then the debt counsellor must set the matter down in the Magistrates Court, where the Magistrate makes a ruling.”

He adds that understanding the debt counselling process and your legal rights under the NCA is vital to prevent being unfairly treated.
“We receive numerous complaints where banks are in the process of sale in execution of a consumer’s home or even as late as the eviction stage before the consumer lays a complaint,” says van Schalkwyk. “Mere application for debt review and paying reduced monthly instalments is no guarantee that creditors won’t take legal action against you.”

He says because of the backlog in the court system, the process can take many months and credit providers may terminate the debt review process after 60 days and proceed with normal debt collection procedures such as issuing summons, default judgments, attaching assets and sales in execution and finally, eviction.

“Consumers get into financial trouble for a variety of reasons such as losing their job, getting divorced or experiencing a death in the family,” says van Schalkwyk. “The important thing to remember is to seek out help as soon as possible as credit providers are more likely to accept a repayment proposal before you are too far behind in your repayments. If something goes wrong with the process, complain as soon as possible.”

Many of the complaints received by the Credit Ombud involve consumers who have entered the debt review process, continued to pay the amount the debt counsellor told them to pay and without prior warning, receive a summons or notice of sale or eviction.
“Unfortunately under the law, the credit provider has usually acted within their legal rights,” says van Schalkwyk. “Even if the consumer applied for debt review and is making regular repayments, until the parties reach agreement or until the Magistrate ruled in the matter, the credit providers can still initiate a legal process against the consumer to recover what’s owed to them.”
Other complaints to the office of the Credit Ombud stem from debt counsellors not following the correct processes, with consumers suffering the loss. Communication between debt counsellor and consumer can also be poor, especially around counter-proposals. “The debt counsellor may submit a proposal to the credit provider about how the consumer intends to settle his debt and the bank comes back with a counter-proposal,” says van Schalkwyk. “The debt counsellor sometimes doesn’t bother to tell the consumer and as a result of the lack of response to the counter-proposal, the credit provider terminates the debt review process.”
He says it is of utmost importance that credit providers and debt counsellors both ensure that the consumers are at all time fully appraised of all correspondence being exchanged.
Debt counsellors should also inform consumers about the consequences of the Notice of Termination of the debt review process from the credit provider. If the debt counsellor cannot negotiate with the credit provider, the consumer will receive a summons, or worse, judgment will be taken.
“Educating yourself about the debt counselling process and all the legal requirements it entails is the key to successfully working your way out of debt,” says van Schalkwyk.
To find out more about the complaints process log onto www.creditombud.org.za or call 0861 OMBUDS (0861 662837) or email us on ombud@creditombud.org.za.

Tuesday, August 16, 2011

Compuscan Academy training in Sommerset West next week




training postponed till Friday the 5th of September 2011

Monday, August 15, 2011

Bad News IN Collett V FRB




See below for more details

Sunday, August 14, 2011

Disaster in Collett Constitutional Court Application

The Constitutional Court has now decided not to hear the application of Mz Collett in regard to the 86(10) issue as ruled on in her case by the Supreme Court of Appeal. The NCR has also been turned away.

While the decision is very disappointing from the view of consumers who are currently facing frivolous "terminations" from creditors it does not mean that their rights under debt review are negated.

The Collett v FNB ruling does set out very specific conditions where a Credit Provider can terminate a debt review. Two conditions being: That the account was in a default status at the time of applying for debt review and two where the proposal made will not lead to the eventual satisfaction of the debt. [Section 103(5) would lead to eventual satisfaction under law].

FNB have made the following statement:
"FNB will act responsibly and will only seek a termination of a debt review when we have explored all possible alternatives. FNB's policy is that we will not take this step if we can see the customer is making a sincere effort to normalise their credit agreements." - CEO of FNB Home Loans, Jan Kleynhans

While this may seem like a total lie in view of FNB's recent actions it may indicate that in the near future they will not be simply terminating because 60 days have past. This promise of Mr Kleynhans can be quoted in the many 86(11) applications that FNB are now forcing consumers to make at High Court.

Creditors can send a 86(10) letter which says we don't want to help through debt review and then when they begin legal action the consumer can make a 86(11) application to have a court say they must be involved with the debt review.

So while consumers rights are still protected under section 86(11) of the NCA, Credit Providers will probably continue in their campaign to cause consumers more unnecessary costs by "terminating their participation in the debt review" and approaching other courts, trying to get judgments and making extra costs that troubled consumers can ill afford.

This is a blow for over indebted consumers who will now have to part with more funds defending their assets. This will probably remain the case until the National Credit Amendment Act is in effect which will hopefully address this matter.

Wednesday, August 10, 2011

TO ALL DEBT COUNSELLORS IN WESTERN CAPE:

DCASA meeting announced:


You are hereby invited to attend the DCASA Western Cape Meeting on Friday, the 12th August 2011 at 11H00 at Parow Golf Club.

Kindly confirm attendance to the meeting no later than close of business, Thursday, the 11th August 2011 at dcasa@dcasa.co.za.



Kind regards

DCASA

Friday, August 5, 2011

Sort out incorrect Credit Bureau listings

The Credit Ombud will help people who find themselves being unfairly listed with a credit bureau for unpaid debts. The Credit Ombud resolves complaints from consumers and businesses that are negatively impacted by credit bureau information or when a consumer has a dispute with a credit provider, debt counsellor or payment distribution agent.

“If a debt collector lists a consumer with a credit bureau they must have followed a number of steps outlined in the National Credit Act (NCA),” says Credit Ombud, Manie van Schalkwyk. “Failing to do this can mean a consumer is incorrectly listed which can have a severe negative impact on the consumers’ life, including affecting their job or chances of employment.”

The Credit Ombud recently investigated a complaint from a consumer who had moved her children from a private school to a public school as the family was experiencing financial difficulties. Although the woman confirmed with the private school telephonically that her accounts were up to date, she received a letter from the school informing her that there was more than R4000 in fees outstanding.

“The letter did not mention their intention to list the alleged default at the bureau, nor that the account would be handed over to a debt collector who will list the information at the bureau. ” explains van Schalkwyk. “Even after she had settled her account, she was still handed over to a debt collector without her knowledge.”

The debt collector then listed her as defaulting on her credit profile as she had failed to pay a penalty fee. The consumer’s employment was jeopardised and she lodged a complaint since she had not been notified about any of the charges, including the penalty fee, and neither was she informed at any stage of their intention to list her at the credit bureau.

“We contacted the credit bureau to find out if correct procedure was followed before the consumer was listed and neither the school nor the debt collector had complied with the requirements in the NCA,” says van Schalkwyk. “The credit bureau was ordered to remove the listing from the consumer’s profile.”

He explains that having a default listing against a consumer’s name, even for a small amount, can not only cause financial distress, but prejudice their chances of getting a job or accessing further credit.

Under the National Credit Act (NCA), consumers have the right to access and challenge information held by a credit bureau and are entitled to get this information free of charge once a year. If the consumer requests the information more than once in a twelve month period they may have to pay a small fee which is also regulated by the NCA.

“Consumers are entitled to challenge and request proof of the accuracy of information held by a credit bureau as well as that the correct procedure should have been followed prior to any listing,” adds van Schalkwyk. “Should a credit bureau fail to provide the consumer with proof of accuracy of information or that the stipulated procedure was followed, it is compelled to remove the disputed information from its records.”

Van Schalkwyk says there is a clear process to follow if you believe that incorrect information has been lodged with a credit bureaux under your credit profile.

He suggests consumers do the following:

- If your application for credit is refused or you have a bad credit rating, find out the name of the credit bureau which gave a report about you

- Check if the information is correct

- If it is not, contact the credit bureau and lodge a dispute

- The credit bureau must give you a reference number

- The credit bureau must correct the information or resolve the dispute within 20 business days

- If you are not satisfied with the outcome, or if you did not get an answer from the credit bureau

- Lodge a complaint with the Credit Ombud

During 2010, 3870 disputes were opened at the office of the Credit Ombud of which more than 90% were finalised.

The Credit Ombud ruled in favour of consumers in 69% of cases and 86% of all cases were resolved within 60 days. The services of the Credit Ombud are provided free of charge to consumers who lodge complaints against credit providers, debt counsellors, payment distribution agents and credit bureaux.

“We will continue to protect consumers against unscrupulous debt collectors who do not follow the law,” concludes van Schalkwyk. “We encourage consumers who find they are affected by an unfair credit listing to speak up and contact our office.”

Consumers can contact the Credit Ombud office on 0861 66 28 37 or visit www.creditombud.org.za

Tuesday, August 2, 2011

How To Consolidate Debt Into Mortgage.

If compared with some of the BRIC (Brazil, Russia, India, and China) countries, South Africa has a relatively well-developed banking sector. For example in terms of private sector credit to GDP, the depth of South Africa's financial sector is nearly three times that of India and the average for SSA and nearly four times that of Brazil. In fact, South Africa also has one of the largest capital markets among emerging economies, with the ratio of market capitalization to GDP at 178 per cent in the recent past.

In spite of this, many in SA are up to their necks in debt and struggling to pay back the bills they have. If you are one of them and heading straight towards financial disaster, debt consolidation can help you out. With consolidation you can pay outstanding money owed to creditors off in one lump sum and be left with just the one easier monthly repayment. The Interest rates applied to this new consolidated loan are usually a lot more favorable than the rates a person pays when having to pay off several creditors over a period of time.

Consolidating debt into a mortgage refinance means refinancing a property and paying off consumer debt accounts with the proceeds of a new home loan. Here funds left over, after a first or second mortgage replaced, are directed to consolidate debt. Some lenders allow cash-in-hand to be used to pay debts, whereas others disperse funds to each consumer account at the time of closing on the new mortgage.

Read on to learn more about how to consolidate your debts into mortgage.

• Create a list of your debt accounts, including credit cards, auto and student loans, clothing accounts and personal loans then add up the outstanding balances. This will give you a clear idea about your current financial obligations.

• Obtain payoffs on your first (and/or second) mortgage from your creditors to determine the size of the new loan you will need. Make sure your new loan replaces your existing mortgage (or mortgages) and covers all the settlement costs.

• While consolidating debt into a mortgage, you will need to have enough equity to secure a mortgage large enough to pay off your consumer accounts. Whether you get such a loan is also up to the banks to decide. To figure out the equity in your home, subtract the amount you owe on your mortgage from the approximate value of your home. To get a clear idea of what your home is worth, do a basic value or comparable sales search or ask a real estate agent.

• Get ready to apply for a new home loan. Collect your last two or three pay slips, bank statements and a list of all your consumer debt accounts. Before approving your new mortgage, your loan officer will revaluate your equity thoroughly. You can choose which accounts you wish to pay off with the proceeds of your new mortgage, depending on the amount of your outstanding debt.

• Once you complete your application paperwork, you will probably be required to have your home appraised. Your loan officer will arrange the home appraisal which might cost you a little depending on your market and type of property.
Keep the above mentioned points in mind when considering consolidating your debts into a mortgage.



Article submitted by Regina King