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Thursday, September 29, 2011

All Pro DC's Roadshow

MEETINGS FOR PROPOSALS FOR AMENDMENTS TO THE ACT AND INTRODUCTION TO THE ASSOCIATION 


27 October 2011 - PORT ELIZABETH
28 October 2011 - GEORGE
17 & 18 November 2011 - JOHANNESBURG
During November the committee will be travelling all over Western Cape
(Dates to be announced)

Wednesday, September 28, 2011

ALL PRO DC's getting ready to associate 'officially'






The Alliance of Professional Debt Counsellors or All Pro DC's have published their constitution and have started distributing official application forms (for joining the association).

There has been a lot of interest in this new association with many DC's sharing information and comments on their informal forum (online). It will now be interesting to see how the interest converts into membership.

The rumor is that October 1st 2011 is the date to watch

We wish them all the best.

Unsecured personal loans grow at the expense of mortgages


                                                                                   
The National Credit Regulator released its ‘Consumer Credit Market Report’, which is based on data submitted to it by registered credit providers. This edition covers credit market information from June 2010 up to June 2011.
The total value of new credit granted increased from R80.75 billion for the quarter ended March 2011 to R85.08 billion for the quarter ended June 2011, an increase of 5.36% when compared to the previous quarter, but 25.95% higher than a year ago. 

The number of applications received for credit increased by 834,700 from 5.80 million in March 2011 to 6.63 million in June 2011 an increase of 14.39% (also an increase of 1.43% when compared to the same period last year). The following were some of the most significant trends observed for the quarter ended June 2011: 

·     The value of new mortgages granted increased by 2.78% quarter-on-quarter from R24.76 billion to R25.45 billion; 

·    Secured credit, which is dominated by vehicle finance, showed a decrease from R27.45 billion for March 2011 to R26.96 billion for June 2011 (a quarter-on-quarter decrease of 1.77%);
·       Unsecured credit increased from R16.69 billion for March 2011 to R18.95 billion for June 2011 (a quarter-on-quarter increase of 13.54%);

·    Credit facilities which mainly consists of credit cards, store cards and bank overdrafts increased by 15.65% quarter-on-quarter from R10.43 billion to R12.06 billion;

·      Short term credit showed a quarter-on-quarter increase of 16.21% from R1.42 billion to R1.65 billion;

·       Individuals with a gross monthly income of more than R15,000 received on average 83% of the number of mortgages granted over the period June 2010 to June 2011.

As at June 2011, the total outstanding consumer credit balances (or gross debtors’ book) was R1.23 trillion representing a quarter on quarter growth of 1.32%. The breakdown was as follows: mortgages accounted for R773.37 billion (63.04%); secured credit was R228.97 billion (18.66%); credit facilities were R135.75 billion (11.07%); unsecured credit was R87.98 billion (7.17%) and short-term credit was R747.10 million (0.06%).
The banks’ share of the total outstanding consumer credit as at June 2011 was R1.10 trillion (89.88%) with the retailers at R37.76 billion (3.08%), non-bank vehicle financiers at R40.87 billion (3.33%) and “other credit providers” at R45.51 billion (3.71%). Other credit providers consist primarily of pension-backed lenders, insurers, non-bank mortgage lenders and securitized debt.

Tuesday, September 27, 2011

Debt counsellors go belly up

By: Nhlanhla Ncaca

Johannesburg - The debt-counselling industry has had a major shake-up following the closure of over a thousand financially stricken debt counsellors.

Of the 1 700 debt counsellors who registered when the National Credit Act (NCA) came into effect four years ago, only 400 remain operational, leaving millions of highly indebted consumers stranded.

The introduction of the NCA ushered in the debt-counselling industry, but exorbitant legal costs and poor profitability have led to the consolidation of the market despite an increase in the number of highly indebted South Africans.

Consumers affected by the closure of large numbers of debt counsellors will have to start the process from scratch because the existing files will be transferred to the surviving debt counsellors.

Organisations helping over-indebted consumers say debt relief measures are now moving at a slow pace.

Paul Slot, chairperson of the Debt Association of South Africa, said flaws in the legal system created confusion for some debt counsellors, forcing them to close down their offices and leaving consumers stranded in the process.

The different interpretations of the NCA proved to be complicated for many debt counsellors, he said.

“The legal process was moving at a slow pace and our courts of law remain a challenge.

“More than nine million consumers are over-indebted and need to be helped. Stakeholders need to work together to make the process work,” said Slot.

Slot said the NCA initially recommended that consumers undergo debt counselling on receipt of the Section 129.1 notice or the letter of demand from credit providers advising a defaulter of imminent legal action should they fail to make immediate payment.

However, the courts later declared that consumers needed to undergo debt counselling as soon as they started to experience difficulties in honouring credit agreements.

Slot singles out this confusion over interpretation of the NCA as one example that resulted in many debt review applications being dismissed by courts.

The end result of this confusion was the de-registration of many debt counsellors, who had also discovered that they were not making much profit because they had incurred huge legal costs.

Slot said the implementation of the NCA had not been an easy journey for debt counsellors. He said the task team the National Credit Regulator (NCR) formed a few years ago to look into challenges faced by debt counsellors delivered positive results last year.

The debt-counselling process was compromised in some instances because of administration flaws, which resulted in credit providers claiming not to be receiving loan repayments from consumers.

To deal with the problem, the NCR accredited payment distribution agencies to collect repayments from consumers and distribute the funds to creditors.

More consumers are repaying their loans as a result of the introduction of this collection method.

The Credit Ombuds, Manie Van Schalkwyk, said this week that significant strides had also been made in resolving complaints from consumers and businesses negatively affected by credit bureau information.

Last year alone, the office investigated 3870 disputes and 3550 of these were settled.

About 69% of the rulings were in favour of consumers.

The Credit Information Ombudsman changed its name to Credit Ombuds last year and together with the Pension Funds Adjudicator, the Financial Services Board (FSB) and the NCR launched a centralised helpline to minimise consumer confusion regarding which organisation to contact in the event of a dispute.

Van Schalkwyk said the role of the Credit Ombuds was important in making a difference in the lives of indebted consumers.

“The Credit Ombuds has an important role to play in spheres of debt counselling,” he said.

Magauta Mphahlele, chief executive officer of the National Debt Mediation Association, reiterated that the NCA had made a difference in the lives of many consumers, but she expressed concern about some consumers who seemed to have lost trust in the debt-counselling process.

Her office resolves complaints from over-indebted consumers who complain about unfair service from debt counsellors and service providers. She said her office received on average 400 complaints a month from disgruntled consumers undergoing debt review.

Some of the problems resulted from the consumer’s failure to ­understand the debt-counselling process.

She advised over-indebted consumers to act as soon as they started experiencing repayment problems: “The NCA is still young and we are doing well, but consumers do not seem to understand the short relief that debt-counselling offers,” said Mphahlele.

 - City Press


Some of these figures have changed since this article was researched but the problems facing the industry continue.

Don’t give up disputing your credit bureau information

There has been an increase in the number of complaints to the Credit Ombud regarding difficulty consumers face in getting the correct assistance when trying to  dispute  the accuracy of their credit information held by the credit bureaux. 
“Many of the complaints we received related to consumers at times not getting the relevant dispute reference numbers for dispute logged.” says Credit Ombud, Manie van Schalkwyk. “At times , consumers were referred to their courts or their credit providers for assistance when disputing their credit records.”
But van Schalkwyk says in terms of the National Credit Act (NCA), credit bureaux are required to take reasonable steps to seek evidence in support of the challenged information, provide any consumer who challenges their credit information with a copy of evidence supporting the information or if the credit bureau is unable to find credible evidence backing up the information, they must remove the information and all record of it from their files.
“Every person has the right to dispute the accuracy of their credit information and a dispute reference number must be issued to consumers immediately, whether the information was disputed telephonically or in writing,” adds van Schalkwyk. 
He explains that the best way for consumers to dispute unfair or incorrect credit information listed on their credit profile is first to contact the relevant credit bureau and record a dispute by specifying the information under dispute and requesting a dispute reference number.  The issuing of a credit bureau dispute reference number is proof that the consumer’s dispute has been logged. 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 you can log a complaint with the Credit Ombud, this service is free of charge to consumers,” says van Schalkwyk.
In the event that your dispute is rejected by the credit bureaux, you should contact the credit Ombud. The office requires information from the consumer including the information disputed and reasons why you are disputing it as well as your personal details.
“It’s very important to keep track of all your communication with the credit bureau, including written communication, the telephone number you used to call the credit bureau, as well as the name of the person you spoke to and the date.
 “Our main aim is to ensure that innocent consumers aren’t prejudiced by incorrect or unfair credit information held on their credit profiles and that credit bureaux respond to consumer enquiries as they are required to by law,” says van Schalkwyk.  Consumers can contact other credit bureaux on the following numbers:
Transunion – 0861 886 466
Experian – 0861 105 665
Compuscan – 0861 514 131
XDS – 0860 937 000
And the Credit Ombud on 0861 662837 or www.creditombud.org.za

Friday, September 23, 2011

Google Chrome fighting with DC Partners Debt Wise system

As a result of a compatibility problem with Google's browser Debt Wise have published the following comment:

Dear Debt Counsellor
Due to a recent update to Google Chrome, it doesn’t allow the download of certain documents on the Debtwise system. You would need to turn the popup blocker off to be able to generate your documents.

Please follow the steps below to turn the popup blocker off:

1. Click the wrench icon on the browser toolbar.
2. Select Options (Preferences on Mac and Linux; Settings on a Chromebook).
3. Click the "Under the Hood" tab at the left of the screen.
4. Click Content settings in the “Privacy” section.
5. In the “Pop-ups” section, select “Allow all sites to show pop-ups.” and go back to the Debtwise Program

We hope that this would help you to ensure that your documents are generated timeously and hassle-free.
Regards
DC Partner

Wednesday, September 21, 2011

Input for proposed amendments to the NCA

Following the visit by the AllProDC members as well as the letter send to DTI by DCASA on 22 June 2011 DC's have been invited to submit recommendations to the DTI. DCASA is in the process of compiling recommended amendments to the NCA and if you have any proposed amendments of the NCA we would like to hear from you.
The following are examples of the issues already identified for inclusion:
Terminations (ex Collette),
Section 86(2),
Section 129,
Court documents and process, jurisdiction issues,
Delivery (s65, s168, s129(1)),
86(2) in 129 vs. 130, Joint applications if COP,
ambiguity between Section 129(1) and Section 127(7),
Section 129(3),
Section 130(2),
when sequestration can commence,
130(4),
Education of DC’s,
Section 85,
Section 86(8),
Clearance certificate,
Registration of PDA’s to be included in NCA,
clarity on default in Section 103(5),
Need for poor man sequestration,
Need for CP’s share cost of Debt review and collection via PDA,
Debit order cancellation and salary deductions.
If you would like to submit a proposed amendment please identify the section of the NCA that requires review, include a very short motivation and lastly proposed solution. (Please use format below) Proposed amendments to the NCA:
NCA Section:
Short motivation:
Proposed Solution:
These can be submitted to dcasa@dcasa.co.za or messages@webs.com

Monday, September 19, 2011

New details for NCR Help Desk for Debt Counsellors

The NCR has established a helpdesk which will be available to debt counsellors from Monday to Thursday, 8:00-17:00 and on Friday from 08:00-16:30. (Excluding public holidays) as from 1 October 2011.

The email address of the helpdesk is dcsupport@ncr.org.za

The purpose of the helpdesk is to allow debt counsellors to ask any debt counselling related questions with which they are grappling. An answer will be provided within 3 working days to your query.

Please take note that the helpdesk was outsourced to Octogen in the past and DC’s were using dc@ncrhelp.co.za. This email will be deactivated as from 30 September 2011. Please refrain from sending your questions to this address and rather use dcsupport@ncr.org.za.

Friday, September 16, 2011

DC Partner information regarding consumer deposit references

DC Partner PDA have issued the following information:

Dear Debt Counsellor

Please take note of the fact that as from Monday, 19 September 2011, all our bank accounts will be changed to be subjected to transaction referencing.

All deposits that are made into the account will be forced to be subjected to a referencing check.

Only the following references will be allowed:

ID Number, which contains of 13 digits and in the correct ID format, or

the Application number, which must always contain App + the physical number.


We trust that this will ensure speedy and accurate allocation and ensure speedy distributions.

Please forward all enquiries to pda@dcpartner.co.za

Kind Regards

DC Partner

Thursday, September 15, 2011

Credit Ombud helps a consumer...somewhat.

A recent complaint laid by a consumer with the Credit Ombud against a credit provider shows just how vigilant consumers should be when taking out loans.

The consumer took out a loan of R5000 with a micro lender, but soon realised that he would not be able to pay back the loan as agreed.

“The credit provider put a garnishee order on my salary for R800 per month to recover the debt from October 2008 to March 2011,” he explains. “The total amount I had paid by April 2011 was amazingly, R24 000, but I was told that I still owed R6 760 on the loan.”

The Credit Ombud investigated the case and found that the collections agent for the micro lender had acted in contravention of the National Credit Act (NCA) and was ordered to close the file and write off the outstanding balance. The Credit Ombud also issued a letter to the consumer’s salary department, requesting that the garnishee be stopped with immediate effect.

“Credit providers are entitled to include a number of charges in a credit agreement, but these must be in line with the national credit regulations,” says Credit Ombud, Manie van Schalkwyk.

Costs which a credit provider is allowed to include in the credit agreement over and above the principle debt or capital amount include service fees, initiation fees, credit insurance and interest.

“The credit agreement must explain all the costs to the consumer,” says Van Schalkwyk. “The consumer must, for example, be able to choose whether they cede their existing life policy, instead of taking out credit insurance from the credit provider.”

He says that monthly service fees are never allowed to be more than R50 plus VAT per month or R600 plus VAT per year. All interest and initiation fees are regulated under the Act.

“A consumer must also be made aware that should they default on a credit agreement, they are liable for collection and attorney fees as legislated in the Magistrates Court Act and Rules, Debt Collectors Act, High Court Act and Rules and the frameworks of the relevant law societies,” adds van Schalkwyk. “Not paying back a loan on time can cost consumers far more than the original amount they borrowed just in interest and collection fees alone,” he says. “The best way to avoid this is to make sure that you really can afford the loan in the first place.”

Van Schalkwyk advises consumers to regularly check the status of the outstanding amount of their loan and what charges they are being billed for on a regular basis.

“A consumer must be advised on the total amount that they will be liable for, inclusive of all applicable costs,” says van Schalkwyk. “Once you see that something untoward is happening on your account or you suspect that you are being over-charged, you can complain to the Credit Ombud.”

He adds: “educating yourself about how much of the original loan amount and of the interest you are paying off will help you put a budget and financial plan in place to pay off your debt more quickly. Also beware of loan agreements that seem to offer very good terms – if you default you could end up sacrificing your financial freedom.”


No information was released about the consumer receiving any funds back if there had been an exceeding of NCA Section 103(5) however.


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

Wednesday, September 14, 2011

NDMA Invite 2011

On the 1st January 2011 a new Credit Industry Code of Conduct came into effect, bringing with it a fresh set of challenges and opportunities for Credit Providers and Debt Counsellors alike. As the industry body tasked with implementing the Code, the National Debt Mediation Association (NDMA) is responsible for ensuring that all Credit Providers who accept the Section 48(1)(b) conditions of registration through the NCR affiliate to the NDMA and comply with the code. The NDMA is also tasked with ensuring that all Debt Counsellors who are registered with the NCR are regularly updated on latest developments and progress within the credit industry space.

The CEO of the NDMA, Ms Magauta Mphahlele invites you to a Joint Credit Provider and Debt Counsellor Briefing Session where stakeholders will be briefed by NDMA Management on the role of the NDMA in the debt mediation process, existing trends, and the current status in terms of the implementation of the Code of Conduct. The session will focus on the following:


• An industry overview
• An NDMA Organisational Overview
• The NDMA’s role in Debt Mediation
• An explanation of the Credit Providers Affiliation Requirements & Process
• An outline of the Debt Counselling Rules System

Credit Providers and Debt Counsellors will also have the opportunity to engage with each
other as well as with the NDMA and ask any pertinent questions or seek clarification on any
aspect of the debt mediation process.

Date: Tuesday, 27 September 2011
Time: 09h00 to 13h00
Venue: Protea Hotel Sea Point

Kindly RSVP by Tuesday, 20 September 2011


For Queries:
Nontobeko Mzilethi
Tel: 011 326 3459
Email: nontobekom@ndma.org.za

NOTE:
The NDMA will be hosting the same briefing session in the following areas as well:
28 Sept – Port Elizabeth
30 Sept – Durban
4 Oct – Bloemfontein
6 Oct – Polokwane
11 Oct – Nelspruit
13 Oct - Rustenburg

DCASA meeting in Cape Town

The DCASA Western Cape Branch meeting will be held on Friday, the 16th September 2011 at 11H00 at Parow Golf Club.


Kindly confirm attendance before Thursday, the 15th September at dcasa@dcasa.co.za

NDMA meetings to be held in Spetember 2011

The NDMA have announced meetings to be held this month.
All DC's are welcome to attend but need to RSVP as seats will be limited.
We will have the dates shortly.

Friday, September 9, 2011

NCR warns DCs Leaving the Industry

The NCR have issued the following statement about DC's who drop clients and leave them in the lurch suddenly:

We would like to appeal to all debt counsellors to inform the NCR when you change your contact details or when you are no longer practising as a debt counsellor. If you do not intend practising debt counselling further, we would expect that you fill out a form 10 and send to our registration department.

To this end we would appreciate that you find another DC to take over your files and request that the proper transfer procedures are followed or alternatively request that the NCR assist you in this regard so that consumers are not in any way prejudiced by you leaving the industry.

Too many DCs have brought debt counselling into disrepute by absconding and leaving clients in the lurch. Such conduct is unacceptable and the NCR will be taking action against those debt counsellors with a view to prosecuting such offenders as this places a huge burden on the NCR to assist these clients.

Friday, September 2, 2011

Wesbank blame Debt Counsellors for telling taxi owners about debt review

Recently Wesbank have been saying how happy they are since Collett v FRB has set a precedent that allows them to take taxi owners to the High Court to try get the court to ignore the debt review applications of these consumers in the Magistrates Courts and try get permission to sell these consumers taxis.

A large number of taxi owners have entered into debt review since the inception of the NCA. They say that some DC's who set the matters before courts did not make arrangements for these consumers to pay even reduced payments monthly during the time the matters were waiting at court. Due to Wesbank being unwilling to come to a reasonable settlement they have now sat out of pocket for many months while the court application was on the waiting lists. It seems that if Wesbank had been able to help consumers more in the debt review process this strange situation would not have occurred.

These non paying consumers have naturally not been popular at the bank. Indeed since debt review is a fair debt collection process it is strange that there were some consumers who were not making monthly payments. Wesbank have not revealed what percentage of taxi owners under debt review were not paying monthly.

Normally consumers pay each and every month they are under debt review. The debt review process is the ultimate "fair" collection process ensuring all creditors are treated fairly (big or small).

Many taxi owners did make regular payments via the process. However even in these cases Wesbank often wanted more funds from them each month than the consumer could responsibly afford. Wesbank are now happy that they can take these consumers to high court and cause them to pay extra thousands of Rands in legal fees and maybe loose their means of earning a living.

Wesbank have not stated what the long term plan is for recovering the shortfalls that could now possibly result from a glut of taxi owners losing their way of earning a living. When a vehicle is sold for a loss by the bank on auction then the consumer is still liable for the loss for years to come. Of course, these consumers will have no work and thus no means to repay the loss. It is a sad situation where neither party really wins in the end. It has been said though, that the banks are so desperate for funds that they are happy to just try increase their cash flow in the short term and not worry about the long term for the moment.

However many banks are finding that matters going to the High Courts are simply being referred back to the Magsistrates Courts as is suggested in the Collett v FRB ruling. The banks are many times having to foot the bill in these cases. So, instead of increasing their income monthly, they are incurring further costs even in the short term.

Wesbank too face the challenge that if a matter is referred to debt review because funds may have been lent "recklessly" to consumers (who could not afford it)these matters cannot be referred to the High Court according to the Collett ruling. In such cases the bank may be punished according to the Credit Act.